Author Topic: VAC Education and Training Benefit (ETB) [Merged]  (Read 8082 times)

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Offline ballz

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Re: VAC Education and Training Benefit (ETB) [Merged]
« Reply #25 on: October 16, 2019, 00:44:49 »
The way I read the website, it's already extended to Class A reservists.

Quote
"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:
at least 12 years of authorized days of CAF Service (4382 days) to receive up to $81,920 or
at least 6 years of authorized days of CAF service (2191 days) to receive up to $40,960"

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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Offline Brasidas

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Re: VAC Education and Training Benefit (ETB) [Merged]
« Reply #26 on: October 16, 2019, 01:42:44 »
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.

Offline Brihard

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Re: VAC Education and Training Benefit (ETB) [Merged]
« Reply #27 on: October 16, 2019, 05:40:48 »
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.
Pacificsm is doctrine fostered by a delusional minority and by the media, which holds forth the proposition it is entirely possible to pick up a turd by the clean end.

Online stoker dave

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Re: VAC Education and Training Benefit (ETB) [Merged]
« Reply #28 on: October 16, 2019, 07:51:43 »
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. 

Offline Tcm621

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Re: VAC Education and Training Benefit (ETB) [Merged]
« Reply #29 on: October 18, 2019, 00:26:19 »
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.

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.

Offline daftandbarmy

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Re: VAC Education and Training Benefit (ETB) [Merged]
« Reply #30 on: October 18, 2019, 00:33:28 »
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 ;)
"The most important qualification of a soldier is fortitude under fatigue and privation. Courage is only second; hardship, poverty and want are the best school for a soldier." Napoleon

Offline x291er

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Re: VAC Education and Training Benefit (ETB) [Merged]
« Reply #31 on: October 18, 2019, 15:52:44 »
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.

« Last Edit: October 18, 2019, 16:00:27 by x291er »

Offline daftandbarmy

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Re: VAC Education and Training Benefit (ETB) [Merged]
« Reply #32 on: October 18, 2019, 23:32:14 »
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....
"The most important qualification of a soldier is fortitude under fatigue and privation. Courage is only second; hardship, poverty and want are the best school for a soldier." Napoleon

Offline Tcm621

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Re: VAC Education and Training Benefit (ETB) [Merged]
« Reply #33 on: October 20, 2019, 00:37:13 »
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.

Offline Kilted

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Re: VAC Education and Training Benefit (ETB) [Merged]
« Reply #34 on: October 20, 2019, 00:50:39 »
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.

Offline Brihard

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Re: VAC Education and Training Benefit (ETB) [Merged]
« Reply #35 on: October 20, 2019, 02:04:25 »
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.
Pacificsm is doctrine fostered by a delusional minority and by the media, which holds forth the proposition it is entirely possible to pick up a turd by the clean end.

Offline ballz

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Re: VAC Education and Training Benefit (ETB) [Merged]
« Reply #36 on: December 27, 2019, 18:30:04 »
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

Quote
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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Offline meni0n

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Re: VAC Education and Training Benefit (ETB) [Merged]
« Reply #37 on: December 27, 2019, 18:59:04 »
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.

Offline Brihard

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Re: VAC Education and Training Benefit (ETB) [Merged]
« Reply #38 on: December 27, 2019, 19:15:43 »
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.
Pacificsm is doctrine fostered by a delusional minority and by the media, which holds forth the proposition it is entirely possible to pick up a turd by the clean end.

Offline ballz

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Re: VAC Education and Training Benefit (ETB) [Merged]
« Reply #39 on: December 27, 2019, 19:53:19 »
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.
« Last Edit: December 27, 2019, 19:57:50 by ballz »
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Offline ballz

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Re: VAC Education and Training Benefit (ETB) [Merged]
« Reply #40 on: December 27, 2019, 20:04:29 »
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.

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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Offline Brihard

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Re: VAC Education and Training Benefit (ETB) [Merged]
« Reply #41 on: December 27, 2019, 23:22:17 »
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.
Pacificsm is doctrine fostered by a delusional minority and by the media, which holds forth the proposition it is entirely possible to pick up a turd by the clean end.

Offline ballz

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Re: VAC Education and Training Benefit (ETB) [Merged]
« Reply #42 on: December 27, 2019, 23:48:02 »
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.
« Last Edit: December 28, 2019, 00:27:29 by ballz »
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