08/10/2012 02:44 EDT | Updated 10/10/2012 05:12 EDT

Feds confirm veterans benefits not taxable

Veteran Affairs is confirming the benefits paid to people such as 89-year old Jean Stockwood of St. John's through the Veterans Independent Program are not taxable.

Tolson Stockwood said his mother is being denied a subsidy from the province to help pay for her personal care needs because her combined income is over $1950. That combined income includes a monthly veterans benefit.

"Under Federal law, VIP payments are not taxable benefits," said a spokesperson for Veterans Affairs.

In April, Stockwood's mother broke her hip, and now needs help bathing, walking and taking medication.

As a result, she lives at Cambridge Estates, a personal care home that, he said, costs his mother $1000 over the amount she receives in benefits.

He said her liquid assests are under $10, 000, which means she will run out of money if she does not get a subsidy from the province to pay to stay at the home, which totals $3400.

Ottawa said it has been trying to make it easier for veterans with changes to the benefits program.

"He {Minister Steven Blaney} announced important changes to the Veterans Independence Program (VIP) to make the life of Canada’s heroes easier by moving toward a hassle-free upfront payment," said the spokesperson in an email to CBC News.

"These changes will result in the elimination of millions of time-consuming transactions as veterans will no longer need to submit receipts to get reimbursed," the spokesperson added.

Stockwood said that when his mother was living in her own home, her VIP benefits went to things such as transportation, cleaning and lawn care, but now the money has been redirected to her housing costs.

"Ultimately, we trust that veterans themselves are in the best place to make the choices that affect their benefits," said the spokersperson for Veterans Affairs.

Province says some veterans not eligible for VIP

Jean Stockwood's son, Tolson Stockwood said it is Eastern Health denying his mother the subsidy.

A spokesperson for Eastern Health referred questions about the program to the provincial health department .

"It is the department’s understanding that individuals (veterans) in personal care homes and long-term care facilities are not generally eligible for the Veterans Independence Program," read a statement emailed to CBC News by the provinces Department of Health and Community Services.

Both Veterans Affairs and the province's Health and Community Services department said they would not comment on individual cases.