# VAC Education and Training Benefit (ETB) [Merged]



## Mediman14 (8 Jun 2018)

I was wondering if anyone could tell me about the educational benefit introduced by vac. If a Mbr qualifies for the $80,000 amount. Is that only used for 1 end state? Let's say I choose to attend Dalhousie University for a degree in science, which costs approx. $30,000, I graduate. Now I want to further my education to increase my lively hood. I then apply to Medical school or basket weaving which costs another $40,000. Can I only use the 80 grand to pay for both or just one?


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## kratz (8 Jun 2018)

Searching the VAC E&TB Q&A  offers this answer:



> Q26. I am eligible for $80,000 and my course is two years. I am only able to access $40,000. Why can't I receive the full Education and Training Benefit amount?
> 
> The ETB was designed to provide financial support while you pursue post-secondary education up to a maximum of $20,000 per academic year. If you complete your education and there is funding remaining, you may be able to pursue additional courses or training.


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## brihard (8 Jun 2018)

You can keep drawing on it for other subsequent education until your amount is gone.


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## rskelhorn (9 Oct 2018)

Hi all -

I applied for the education and training benefit through VAC which requires 6 years of paid service to apply.

VAC recently denied my claim and said I fell short with 2151 paid days instead of the required 2191 representing 40 days short.

In the letter, it was stated that the information came from the DND Pension Service Centre.  When I called the DND Pension Service Centre, I was told that they had no record of my reserve time, because it wasn't pensionable.  I had approximately two years in the reserve before going Reg force for approximately six years.

I'm not sure how to obtain records to give to VAC for my reserve time.  This whole system is very  hard to navigate, given most of my information would be held up in archives somewhere.  My service time in the reserves was 2000-2002 qualified QL3 infantryman, then 2002-2008 as an AVS Tech.

Any suggestions?
Kind regards


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## Gunner98 (9 Oct 2018)

First option, you could do an Access to Information Request, (this can be done online, see link 3 below).

You should find a Record of Qualifying Service CF 2440 on your Personnel file - you could request an entire copy or just the form - 
Personnel Files are stored Bank Number: PSE 901

Here are some links- http://www.forces.gc.ca/en/transparency-access-info-privacy/index.page
http://www.forces.gc.ca/en/transparency-access-info-privacy/index.page
http://www.forces.gc.ca/en/transparency-access-info-privacy/request-forms.page

A second option would be to check your records of employment available through your 'My Service Canada Account' - https://www.canada.ca/en/employment-social-development/programs/ei/ei-list/ei-roe.html.


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## Teager (10 Oct 2018)

I find it odd that VAC is only looking at pension as a means for someone's total service. Since reserve pension hasn't been around all that long they should know this or that some people did not buy back.

Guess it's just another way to Delay and Deny.


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## brihard (11 Jan 2019)

Not sure when I'll get a reply, but I just submitted the following access to information request:

"Part 1.1 of the Veterans Well Being Act established the Education and Training Benefit. Veterans who wish to become police or other peace officers may have to complete training at one of the various police academies in Canada, and may or may not be employed, paid, or receive allowances during said time. I want to know if VAC has approved payments under the Education and Training Benefit for the purposes of eligible veterans to attend any of the following:
- The RCMP training academy 'Depot' in Regina, Saskatchewan, to become a regular member of the RCMP.
- Any training program run by the Canada Border Services Agency for the purposes of becoming a Border Services Officer
- Any training program run by Correctional Services Canada for the purpose of initial training and qualification as a Correctional Officer
- Training at the Ontario Police College to become a police officer in Ontario
- Training at the Atlantic Police Academy / Holland College for the Police Science (Cadet) program
- Training at the Justice Institute of British Columbia Police Academy for the purpose of becoming a police officer in British Columbia
- Training at the Ecole Nationale de Police du Quebec for the purpose of becoming a police officer in Quebec
- Any other training program in Canada, that is not a college diploma or university degree, that qualifies an individual to be hired and to serve as a sworn police or peace officer in any Canadian jurisdiction."

When I hear back I'll post, though I'm sure it'll be quite a while. I know this has been of interest to several people.


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## brihard (12 Feb 2019)

That was fast, I just got the ATIP results. Bottom line up front, VAC's ETB will help pay for police training programs that have tuition fees paid by the student.

VAC has approved 20 ETBs for police training. 16 were for the Ontario Police College. That leaves four more, and they redacted the counts for Justice Institute of British Columbia, Halifax Regional Police Training School, and the Ecole Nationale de Police de Quebec. I know VAC redacts when counts are very low so as to not potentially compromise individual privacy and make people identifiable. I can infer from that that between JIBC, Halifax, and Quebec, four more ETBs were approved since the result was definitely not 0. They have not approved any for RCMP, CBSA, Corrections, or the Atlantic Police Academy. 

A quick bit of follow up digging confirmed that every approved program has tuition fees. They didn't approve any for Atlantic, but they do have fees so it's probably just that nobody applied. RCMP, CBSA and Corrections have no fees, and so they probably won't pay ETB notwithstanding that the recruit probably still has considerable costs of living to cover.

So, there we go. Nice to see this applied to a professional training program that isn't a conventional university or college degree/diploma.


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## Teager (12 Feb 2019)

Thanks Brihard great info.


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## Mediman14 (4 Jul 2019)

I recently sat in a scan seminar, a lady from VAC gave a good detailed speech about the programs offered form VAC. She did mention that, there are some stipulations you must take into consideration when applying for the ETB. She had indicated that if you are on the rehab program thru VAC then you are not entitled to receive the ETB. I tried to find what other stipulations there was, but I couldn't find any. I called VAC today and asked, the VAC rep didn't really know of any stipulations. Does anyone know what other stipulations that limits a person from receiving the ETB?


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## Teager (4 Jul 2019)

Mediman14 said:
			
		

> I recently sat in a scan seminar, a lady from VAC gave a good detailed speech about the programs offered form VAC. She did mention that, there are some stipulations you must take into consideration when applying for the ETB. She had indicated that if you are on the rehab program thru VAC then you are not entitled to receive the ETB. I tried to find what other stipulations there was, but I couldn't find any. I called VAC today and asked, the VAC rep didn't really know of any stipulations. Does anyone know what other stipulations that limits a person from receiving the ETB?



If you are on LTD thru SISIP and have the education available thru them you can't receive ETB. However you can still receive the ETB after sisps school or the rehab program.

If you are considered DEC by VAC you can't get ETB.


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## Mediman14 (4 Jul 2019)

just wondering, maybe someone could share some light on this.  if a veteran was to get accepted for the ETB, if he or she currently have a mortgage, how are they able to maintain mortgage payments, bills etc while attending school on a full time basis? Are they expected to have a job while attending school? Is there another program that takes care of that? If not, is it expected for the veteran to give up their mortgage and move in with someone for free? Or are they expected to save up throughout the years? Not everyone will receive an enough disability payment to maintain this
   I realize that the ETB is a good thing, but thinking realistically, is this program available for all? Let's face it, the majority of veterans take advantage of SISSP 24 months. The ETB is not available till after the 24 months, given that the 90% Top up will be gone.

Thoughts? Am I missing something? Or am I not being informed correctly?


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## bdcasey916 (4 Jul 2019)

Heres what I can tell you about ETB from what I know as I am headed into the paperwork for my second payment of term 2.  I am working full time, but I am on a rotating shift schedule so it gives me a little bit more flexibility of doing the program (online). They give you the amount for your books and tuition and then they give you an additional amount for living expenses.  I can't tell you what the number is because it is different for everyone and I don't think they know how it works either. It helps me work less overtime


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## Mediman14 (4 Jul 2019)

Is your program completely 100% online? I could see the ETB working in this case which is awesome! But what about if the program was full time at a secondary school, such as College, university, etc?


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## brihard (4 Jul 2019)

Mediman14 said:
			
		

> just wondering, maybe someone could share some light on this.  if a veteran was to get accepted for the ETB, if he or she currently have a mortgage, how are they able to maintain mortgage payments, bills etc while attending school on a full time basis? Are they expected to have a job while attending school? Is there another program that takes care of that? If not, is it expected for the veteran to give up their mortgage and move in with someone for free? Or are they expected to save up throughout the years? Not everyone will receive an enough disability payment to maintain this
> I realize that the ETB is a good thing, but thinking realistically, is this program available for all? Let's face it, the majority of veterans take advantage of SISSP 24 months. The ETB is not available till after the 24 months, given that the 90% Top up will be gone.
> 
> Thoughts? Am I missing something? Or am I not being informed correctly?



You are missing some stuff. Most veterans are not medical releases, and fewer still qualify for Earnings Loss Benefit at 90%. Most vets leave the military and, like anybody else, find a new job to pay the bills.

Many people work full time jobs and go to school part time, or vice versa. If someone makes the decision to release from the CAF, it’s their responsibility to plan accordingly in terms of personal finance.

I’m looking at the ETB for a graduate program once i get my next move in my current career. I’ll be working full time and probably taking a single course per semester until I’m done.

Others will use ETB to subsidize a full time education (eg trade school, university degree) while also working part time and maybe taking student loans. This is all pat for the course.

However it’s used, ETB is a pretty generous benefit. It’s not intended to be a full free ride through all your costs while in school (that’s what ROTP is for), but it’s a hugely valuable help,


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## Mediman14 (4 Jul 2019)

Brihard,
   You are right, not everyone is medically release. Honestly, I wasn't even thinking that! It was not meant to be a rant, Just wondering if there was such a program that take care of all that besides school. I am still serving but will be 3B releasing in two months, I will be taking advantage of SISSP.
   I will say, it's unfortunate that SISSP and the ETB are not linked together


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## kratz (4 Jul 2019)

Mediman14 said:
			
		

> Brihard,
> You are right, not everyone is medically release. Honestly, I wasn't even thinking that! It was not meant to be a rant, Just wondering if there was such a program that take care of all that besides school. I am still serving but will be 3B releasing in two months, I will be taking advantage of SISSP.
> I will say, it's unfortunate that SISSP and the ETB are not linked together



Depending on your ILP or other post-secondary credits earned prior to release, you can use those with your:
- CAF LTD (previously SISIP LTD), and
- CAF Voc Rehab (previously SISIP Voc Rehab) toward earning a collage diploma within the 24 month period.

If your 3b release injuries are deemed CAF related, after the initial 24 months:
- You might qualify for VAC IRB or VAC DEC, if not then
- You then you might qualify for the ETB. 

If you choose a university that has an articulation agreement with your college, 
you'd only require two additional years study from your ETB funds toward a successful degree.

Saint Mary's University (SMU) BCOMM $8769 tuition + $1800 books per year - $1478 Income tax = 
$7953 net / 12 = $662 per month net ETB:  for food, rent, other expenses.

Edit to include:  If additional funds are required, DND Banking through BMO offers up to $50,000 line of credit for education.


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## bdcasey916 (4 Jul 2019)

Mediman,
Yes my degree is completely online, I found when I was searching for what I wanted to do, that there are only a few schools in Canada that offer Emergency Management and Disaster Planning as a degree program and they offer both 100% in-class and 100% online options.  I was surprised when the letter came as to how much I was getting above schooling costs and when I called they stated its on a sliding scale.  Tuition and books cost x, total cost of program is y and we slide the scale to break it down into my 8 semesters and send me the total at the end of each semester for the next.  This is provided I pass the courses in each semester.
Honestly if you call and ask them about it, the front line agents don't know much about it.  The last time I called, the first person didn't know the answer to my question, his supervisor didn't either.  They had to call one of the less than dozen people that work on that benefit to get the answer and call me back


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## Milhouser911 (12 Jul 2019)

Has anyone seen or heard of a mechanism that would allow someone to combine the SISISP LTD education program with this ETB IOT attend a 4-year program?  LTD states that they will only fund a program that can be COMPLETED in 2 years, so I've been told it can't be done, but these programs would tie together very nicely and become much more than the sum of their parts if that were allowed.

In my case, I'll be taking the LPN (Practical Nursing) program funded by LTD, which is 2 years, rather than the RN (Registered Nurse) program, which is 4.  Unfortunately, the bridge program between LPN and RN is still almost 4 years, which puts me in the position of taking an extra 2 years of classes (albeit there will probably be some PLAR potential to reduce the number of concurrent courses) to achieve something that could be done in 4.


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## kratz (12 Jul 2019)

Sorry, both programs are separate. 

As I mentioned above though, with some creative pre-planning, you can use both toward your end goal of RN training.



> If you choose a university that has an articulation agreement with your college,
> you'd only require two additional years study from your ETB funds toward a successful degree.



So 2 years of LTD at community college for your LPN diploma, 
Then after choosing a university RN program that will PLAR your diplmoa use the ETB to finish off your RN degree.

Yes, it might take a few additional months but it's subsidised training without debt.


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## MJP (29 Jul 2019)

Since great news on the ETB front as people on the supplementary Reservist list can now apply and use the education funding.

Https://www.veterans.gc.ca/eng/education-and-jobs/back-to-school/education-training-benefit


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## Brasidas (15 Oct 2019)

The new Commander of the Canadian Army stated that he will recommend that the ETB be extended to Cl A reservists.

That doesn't mean that the rules are going to change, but he's going to ask that they be changed.


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## brihard (15 Oct 2019)

Brasidas said:
			
		

> The new Commander of the Canadian Army stated that he will recommend that the ETB be extended to Cl A reservists.
> 
> That doesn't mean that the rules are going to change, but he's going to ask that they be changed.



That would be a welcome change. A bunch of us have gotten out or will get out at least in part to access this benefit. And by the time someone has six years of qualifying service as a reservist, we tend to be in leadership roles. It’s hurting units. Way I see it, they basically offer us a paid for graduate degree to quit showing up Thursdays and weekends.  Incidentally freeing up exactly the sort of time needed to work on a degree part time. That’s hard to say no to for early to mid career working professionals.


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## TCM621 (16 Oct 2019)

Brasidas said:
			
		

> The new Commander of the Canadian Army stated that he will recommend that the ETB be extended to Cl A reservists.
> 
> That doesn't mean that the rules are going to change, but he's going to ask that they be changed.



I got to disagree with this one. There is no way a reservist showing up 1 or 2 days a month deserves the same amount as a full time regular force person with all that entails. I have no issue with reservists who accrue 6 years full time service receiving it. 

There is a reason the Reg force should get benefits that the Reserves don't:  they show up basically when they want, they don't move unless they want too and only to where they want to go and they can quit when every they want.


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## daftandbarmy (16 Oct 2019)

Brasidas said:
			
		

> The new Commander of the Canadian Army stated that he will recommend that the ETB be extended to Cl A reservists.
> 
> That doesn't mean that the rules are going to change, but he's going to ask that they be changed.



Class A reservists were always eligible, I thought, as long as they accrue at least 6 years of service, which might take 10 years or so if you're Class A, with a bit of Class B now and then for courses etc?


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## ballz (16 Oct 2019)

The way I read the website, it's already extended to Class A reservists.



> "You should apply for the Education and Training Benefit if:
> 
> you were honourably released from the Canadian Armed Forces (Regular or *Reserve Force*) on or after April 1, 2006, or are a member of the Supplementary Reserve and;
> you meet the “length of service” requirement:
> ...



I don't know how pensionable time is calculated for PRes but I assume that's how they calculate how many days of service you have for this?

If it's literally "you were a Class A reservist for 6 years, here's another $41,000 dollars," well.... that's another story.


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## Brasidas (16 Oct 2019)

Tcm621 said:
			
		

> I got to disagree with this one. There is no way a reservist showing up 1 or 2 days a month deserves the same amount as a full time regular force person with all that entails. I have no issue with reservists who accrue 6 years full time service receiving it.
> 
> There is a reason the Reg force should get benefits that the Reserves don't:  they show up basically when they want, they don't move unless they want too and only to where they want to go and they can quit when every they want.



Brian and I already qualify for it, under the criteria quoted by ballz.

What we (and LGen Eyre) are talking about is the ability for a member to be a reservist while *receiving* the benefit.

Example:
Between deployments, courses, and instructor callouts, a mbr is at over six years service counted day for day.

Another mbr leaves the regforce after 12 years.

In either case, if they enroll in university for four years, they could be cadre for a reserve unit during the training year and instructors during the summer. As it is, they have to release completely or join the sup res. CCA stated that he strongly believes that they should be able to serve as reservists and that he will attempt to allow them to do so.


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## brihard (16 Oct 2019)

ballz said:
			
		

> The way I read the website, it's already extended to Class A reservists.
> 
> I don't know how pensionable time is calculated for PRes but I assume that's how they calculate how many days of service you have for this?
> 
> If it's literally "you were a Class A reservist for 6 years, here's another $41,000 dollars," well.... that's another story.



It 100% is NOT given just based on “you were class A for six years”

The period of service is calculated the same as per the pension regulations. Could a person theoretically accrue the 2191 days almost entirely in Class A? Theoretically, yes. Functionally, the reservists who qualify will be the ones who work lengthy process repeated class B or C in order to accrue enough service. The regulations donMt concern themselves with trying to put service into some hierarchy of worthiness. Your days count whether class A, B, or C; whether you’re infantry in Kandahar or a clerk who got posted right to Ottawa out of basic and stayed there. Time in training, on PAT platoon, or in class at RMC counts.Any attempt to drill it down farther would quickly have become unworkable.

The amount of time in is to be _eligible_ to receive it. The separate issue is that to _qualify_ to receive it, a serving member must honourably release or go supp res. Which sucks for the army, because it disincentivizes staying in the reserves as soon as you have enough service, and it disincentivizes transferring to the reserves when getting out of the regs. I can easily see CCA’s concern. Probably every reserve CO and RSM shares it.


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## stoker dave (16 Oct 2019)

Just to add some perspective, I am a senior engineer on a very large engineering project. I took off my uniform about 25 years ago. 

A former military engineer (I think he was a corporal) took his release and spent a year getting a college certificate in a construction-related field of study.  This study time was subsidized by VAC.  He was hired to work on our site a few months ago. 

So far, things have worked out very well.  He is bright, mature, capable, motivated and does good work.  His combination of military training plus college have assured an excellent future for him. 

So for you guys (and girls) thinking of leaving DND, take advantage of this educational benefit and you can look forward to a bright future.


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## TCM621 (18 Oct 2019)

Brasidas said:
			
		

> Brian and I already qualify for it, under the criteria quoted by ballz.
> 
> What we (and LGen Eyre) are talking about is the ability for a member to be a reservist while *receiving* the benefit.
> 
> ...



Ah, I clearly misunderstood. As far as I am concerned, if you do your 6 or 12 years full time service, I don't think being a reservist should hurt you at all. In fact, having regular force guys transfer to the reserves for college, is only going to help the reserves both in numbers and experience levels.


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## daftandbarmy (18 Oct 2019)

stoker dave said:
			
		

> So for you guys (and girls) thinking of leaving DND, take advantage of this educational benefit and you can look forward to a bright future.



Oh man, there are some career managers who are going to go after you now


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## x291er (18 Oct 2019)

daftandbarmy said:
			
		

> Oh man, there are some career managers who are going to go after you now



I’d be surprised if it hasn’t already had a small affect on mid-career personnel deciding to pull the pin.  Would be interesting to see those numbers.

Concurrently, I hope the recruiting teams have incorporated it as another tool to lure recruits through the door.  When it hits the 3-4 year mark and there is (should be) an uptick in veterans donning their graduation gowns - the CAF PA and VAC PA should be looking to capture that to highlight the men/women who’ve benefited from the program.


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## daftandbarmy (19 Oct 2019)

x291er said:
			
		

> I’d be surprised if it hasn’t already had a small affect on mid-career personnel deciding to pull the pin.  Would be interesting to see those numbers.
> 
> Concurrently, I hope the recruiting teams have incorporated it as another tool to lure recruits through the door.  When it hits the 3-4 year mark and there is (should be) an uptick in veterans donning their graduation gowns - the CAF PA and VAC PA should be looking to capture that to highlight the men/women who’ve benefited from the program.



It might help free up the 'Class B Trap', if nothing else....


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## TCM621 (20 Oct 2019)

x291er said:
			
		

> I’d be surprised if it hasn’t already had a small affect on mid-career personnel deciding to pull the pin.  Would be interesting to see those numbers.
> 
> Concurrently, I hope the recruiting teams have incorporated it as another tool to lure recruits through the door.  When it hits the 3-4 year mark and there is (should be) an uptick in veterans donning their graduation gowns - the CAF PA and VAC PA should be looking to capture that to highlight the men/women who’ve benefited from the program.



I have seen a couple who pulled pin because of the Education benefits. So far mostly guys at the end of their career leaving a few years early.


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## Kilted (20 Oct 2019)

If this is calculated the same way that Reservists are given credit for time when they CT, a Class A soldier with 24 years service (and no class B/C Time) would qualify for the amount for six years. Although someone who did a considerable number of Class B/C contracts would not need as much time. Which it will be interesting to see considering that the Reserve educational reimbursement has been taken away (and if it ends up being permanent) if even some members of the reserves with enough time in who want to go back to school may jump ship. Granted the educational  reimbursed for the reserves was only 8,000, it still was something.


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## brihard (20 Oct 2019)

Kilted said:
			
		

> If this is calculated the same way that Reservists are given credit for time when they CT, a Class A soldier with 24 years service (and no class B/C Time) would qualify for the amount for six years. Although someone who did a considerable number of Class B/C contracts would not need as much time. Which it will be interesting to see considering that the Reserve educational reimbursement has been taken away (and if it ends up being permanent) if even some members of the reserves with enough time in who want to go back to school may jump ship. Granted the educational  reimbursed for the reserves was only 8,000, it still was something.



It’s calculated as per the pension regulations. A day of Class A = 1.4 days of service. A day of class B or C = 1 day of service.

The guys I’m seeing getting out to take it are the 10-15 year crowd, generally working civilian professionals of some sort.


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## ballz (27 Dec 2019)

Had a friend who is planning to use this benefit reach out to me and ask about tax consequences / tax planning for this benefit, so I figured it was worth putting a note here that this benefit is considered taxable income and so those taking it should plan accordingly for the tax bill. If you get all $20k in one year, depending on your province / tax bracket, that might actually only be $10k for you and $10k back to the government... so don't spend it all and let yourself get hit with an unexpected $10k tax bill.

https://www.veterans.gc.ca/eng/education-and-jobs/back-to-school/education-training-benefit/faq



> *Why is the Education and Training Benefit taxable?*
> Income you receive as a result of your current or former employment, including tuition assistance is generally taxable. The same tax rules apply to the Education and Training Benefit, which provides support for college, university or technical education to Veterans with at least six years of military service. However, like any student, you may be eligible to claim the Tuition and Education Tax Credit on your income tax at the federal and provincial levels.


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## meni0n (27 Dec 2019)

ballz said:
			
		

> Had a friend who is planning to use this benefit reach out to me and ask about tax consequences / tax planning for this benefit, so I figured it was worth putting a note here that this benefit is considered taxable income and so those taking it should plan accordingly for the tax bill. If you get all $20k in one year, depending on your province / tax bracket, that might actually only be $10k for you and $10k back to the government... so don't spend it all and let yourself get hit with an unexpected $10k tax bill.
> 
> https://www.veterans.gc.ca/eng/education-and-jobs/back-to-school/education-training-benefit/faq



So would you calculate how much tax you'd need to pay and ask VAC for that amount? VAC asks for a the letter of offer as proof of enrollment and mine got the price per semester so I wouldn't be able to claim more than what's in the letter.


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## brihard (27 Dec 2019)

ballz said:
			
		

> Had a friend who is planning to use this benefit reach out to me and ask about tax consequences / tax planning for this benefit, so I figured it was worth putting a note here that this benefit is considered taxable income and so those taking it should plan accordingly for the tax bill. If you get all $20k in one year, depending on your province / tax bracket, that might actually only be $10k for you and $10k back to the government... so don't spend it all and let yourself get hit with an unexpected $10k tax bill.
> 
> https://www.veterans.gc.ca/eng/education-and-jobs/back-to-school/education-training-benefit/faq



Figure out how much school will actually cost, and ask for only that amount- tuition and school costs are tax deductible, you’ll receive tax form T2202A from your school. The costs will deduct dollar for dollar from your taxable income. If your ETB amount equals roughly your education costs, no tax hit.


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## ballz (27 Dec 2019)

Keep in mind I haven't gone through the process / used the benefit, so everything I am understanding about the benefit is from reading and talking to my friend about it to help him out...

This isn't an expense claim, it's a cash benefit to support education/training. If your tuition is $4000, they don't limit the benefit to $4000, you can still get the full $20k. The other $16k is for books, living expenses, etc.

So, let's say they are paying you the full $20,000, and only $4000 is for tuition. That $20,000 it's going to be included as income when you file your taxes that year. So if you expect to earn $20k that year from another job, then you're going to pay taxes for $40,000 of income that year.

So, if I were in Alberta, I'd look at the combined federal+provincial rates for the applicable income to figure out what is the marginal rate of tax on this additional $20,000. Up to $48,535 of taxable income, the combined rate is 25%. So when I receive that $20,000 from VAC, that means $5,000 is getting tacked onto my tax bill that year.

For tuition, there will also be a corresponding tax credit. If it's $4000 of tuition, you'll get $4000 x 15% = $600 tax credit. (this may vary by province and I believe some provinces offer different tax credits for tuition).

So the net difference you need to plan for in this scenario is an additional $4400 that will have to be paid come tax time.

The simplest way to plan for this is, upon receipt of the $20,000, put $4400 into a savings account and leave it there until tax time. VAC will not deduct the $4400 at source for you from my understanding.


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## ballz (27 Dec 2019)

Brihard said:
			
		

> Figure out how much school will actually cost, and ask for only that amount-



That's literally turning down free money. In the scenario above, not taking the additional $16,000 is basically be turning down $12,000 of actual after-tax money.



			
				Brihard said:
			
		

> If your ETB amount equals roughly your education costs, no tax hit.



Not assured. The tuition tax credit is only 15% of tuition paid. The education and textbook tax credits were eliminated by the Liberals. So even if you only take the $4000 for tuition, if your marginal rate is higher than 15% (and it almost certainly is) then there's going to be a tax consequence. If you plan it poorly and made $80,000-100,000 that year, released, and then received the money for tuition prior to 31 December, your marginal tax rate on that tuition money is going to be quite a bit higher than 15% (like let's say you are in NB... it's probably in the neighbourhood of 37%....... so on that $4000, the net tax effect is 4000*(.37-.15) = $880.


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## brihard (28 Dec 2019)

ballz said:
			
		

> That's literally turning down free money. In the scenario above, not taking the additional $16,000 is basically be turning down $12,000 of actual after-tax money.
> 
> Not assured. The tuition tax credit is only 15% of tuition paid. The education and textbook tax credits were eliminated by the Liberals. So even if you only take the $4000 for tuition, if your marginal rate is higher than 15% (and it almost certainly is) then there's going to be a tax consequence. If you plan it poorly and made $80,000-100,000 that year, released, and then received the money for tuition prior to 31 December, your marginal tax rate on that tuition money is going to be quite a bit higher than 15% (like let's say you are in NB... it's probably in the neighbourhood of 37%....... so on that $4000, the net tax effect is 4000*(.37-.15) = $880.



Regarding 'turning down free money', depends on if you plan to use more of it later- we have ten years to take advantage of it. Doing my masters won't use my entire $40k, I'll probably do something else later down the road, and having more education funding then will be useful.

You're correct on the education amounts being deductible at the 15% marginal tax rate- my brain fart on that one.


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## ballz (28 Dec 2019)

Brihard said:
			
		

> Regarding 'turning down free money', depends on if you plan to use more of it later- we have ten years to take advantage of it. Doing my masters won't use my entire $40k, I'll probably do something else later down the road, and having more education funding then will be useful.



If you're banking on using for a future program then by all means, those are all personal choices, I thought you meant to avoid a tax bill... some people really do think they can take a net loss on these type of things due to tax.

The bigger takeaway from the post is just to get people thinking of tax planning for this benefit. Especially if you are someone taking a transfer-value, between the transfer value and this benefit a little foresight can leave you with a lot more money. Sad part about tax planning is most people don't see someone about it until tax season, and by then it's already too late.


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