01/08/2013 05:18 EST | Updated 03/10/2013 05:12 EDT

Settlement reached in military pension clawback dispute, Halifax veteran says

HALIFAX - A Halifax veteran who launched a class-action lawsuit against Ottawa over the clawback of military pensions says a settlement has been reached.

Dennis Manuge says the settlement is expected to be made public Wednesday following a teleconference call between lawyers representing veterans and Ottawa.

The class-action lawsuit was filed in March 2007 on behalf of Manuge and 4,500 other disabled veterans whose long-term disability benefits were reduced by the amount of the monthly Veterans Affairs disability pensions they received.

Last May, the Federal Court ruled that Ottawa should stop that practice and weeks later, the federal government said it would not appeal that decision.

The government appointed Stephen Toope, the president of the University of British Columbia, to negotiate a settlement with Manuge's legal team.

The Federal Court will have to approve any agreement, and a two-day hearing for that is scheduled to begin in Halifax on Feb. 14.

Internal government estimates have suggested the settlement could run to $600 million, depending on the cut-off date for payments.