Yup. The key to untangling it all starts with the move in 2006 from the Pension Act to the New Veterans' Charter.
There are two components to financial compensation for illness and injury. One is pain and suffering; money you get to compensate for the non-financial ways in which your life now sucks more than it did before you were injured in service. The other is economic loss. This makes up for lost income and earnings potential.
Pre-April 2006, these two things - Economic Loss, and Pain and Suffering, were not distinct in veterans compensation. IF you got sick or hurt in connection with your service and a disability resulted, you would get assessed, your injuries would be measured against VAC's 'Table of Disabilities' (they still are), and you would get a disability %, further modified by how much it was attributable to service, measured in 5ths. So if you got a leg blown off by a land mine, that would be a given %age disabled (I'll say 50% for a convenient number), and 5/5ths attributable to service. 5/5 of 40% = 40% of the maximum possible Disability Pension. You get that til you die, and there's an additional amount monthly if you have a spouse and then for each dependent. It's modeled off the assumption that the veteran was likely the primary economy provider for the family. Another example might be someone develops hearing loss and tinitus they get assessed at say 15% disability, but only at 3/5 atributable to service. 3/5 or 15% = 9% monthly disability payment. Etc etc.
There was no differentiation for whether the vet could still earn an income. Two guys each with the same injury- one does not successfully transition, and they are unable to find or keep gainful employment, and they live off their disability pension. Meanwhile the other guy who IS able to find a good job- say a priority hire with the public service - receives the same disability pension plus their new income. There is no differing compensation based on economic outcome.
There are of course lots of other smaller allowances that come into play for those most seriously injured, those requiring attendance and assistance, those needing modified clothing, etc. But he disability pension is the big one to look at here.
Post-2006 - The move to the New Veterans Charter upended all that, and made veterans compensation comparable to civilian workers' comp. Economic loss and Pain and Suffering were decoupled. Pain and suffering was captured under the lump sum Disability Award, which was tax free and started at I think around max $310k, then got increased a fair bit. Everyone gets a portion of that based on their % disability using the same table of disabilities, the same determination of relation to service in fifths. This compensates for the agony of the injury, illness, and disability. There was an option to take it spread out over months, or all at once.
Economic loss began to get covered very differently. It was now based on whether the vet could still earn a substantial portion of their pre-release income. If they were ruled to have Diminished Earning Capacity - unable to earn 66% or more of what they earned before release - then they qualified for Earnings Loss Benefit, which would pay them monthly, taxable, for up to initially 75% of pre-release income, then eventually up to 90% after some reforms. So back to our two gents who lost their legs- the guy who succesfully transitioned to a civilian career would likely not get (or need) this compensation, as they're earning an income otherwise. Meanwhile the one who's struggled to adapt and is unable to find employment could qualify for ELB, and get most of their pre-release salary. It gives different compensation where there is differing economic results.
Part of the reason for the change was a lot of older vets were coming out of the woodwork having been suffering for years. Someone in their 60s, 70s, 80s stands to gain relatively little from a fairly minor disability pension for their old Korea or Cyprus injuries or their hearing loss. The lump sum was more attractive to them- something to pad the retirement, leave for the kids, finish off the mortgage, etc. In that light it made some sense.
But then about the time the change rolled out in spring of 2006, our troops were just starting to kick *** and take names - and, sadly, casualties - in Kandahar. Afghanistan and what it would generate in terms of casualties was completely unexpected. Dudes on the same tour, in the same fights, with substantially similar injuries claimed just months apart ended up under two wildly different systems. All of a sudden our 'disabled veteran' cohort changed from the aging pensioner to the 21 year old private with a double amputation; the 32 year old medic with traumatic brain injury from concussion. The 28 year old Int Operator with PTSD from six months of calling PID on drone strikes. Now we suddenly had a lot of people profoundly disabled, and a whole ton of cases where the real math could be seen playing out, and it was ugly in terms of how differently some were compensated. Old system to new, less major disabilities where the person could still work generally ended up better under the Pension Act. The more serious ones where someone qualified for Earnings Loss Benefit - especially once it topped up to 90% - often ended up better under NVC. Then there were other blindingly obvious problems, like what happens when a young disabled vet with PTSD and poor life and coping skills receives a quarter million dollar payout, manages to blow it in the midst of substance issues, and gets told 'that's it'.
The changes a couple years ago were mostly optics- the government wanted to claim to be returning to a pension, but really it's just an actuary-derived number pretty coparable to what you would get if you received your disability lump some and invested it prudently to live off the income. And, funny thing, a lot of guys and girls are getting the 'pension for life' (properly, the Pain and Suffering Compensation), and are exercising the lump sum option.
The Pension Act basically gave disabled vets enough money to keep some sort of roof over their head, feed the wife and kids, and quietly bugger off and leave VAC largely alone til they eventually die. The new system splits pain and suffering from economic loss, pisses off a bunch of people while doing so because those who can still work get less than they would have under the PA, and it sets some badly suffering vets up for failure by financially enabling some tremendously poor life choices through payment of a lump sum when they're at their most vulnerable. The new system takes the huge number of overlapping benefits after 2006, and reduces them to a smaller number of simpler benefits, but no hugely different result.
So that in a nutshell is a gross oversimplification of the primary disability compensation component of our veterans compensation. I didn't get into several other things because there are too many rabbit holes on this, but that captures the biggest difference and what some of the major issues are.
What it is is a goddamned mess.