A new report by the parliamentary budget office estimates that only $18.4 million of the $65 million set aside for the Last Post Fund, which is overseen by Veterans Affairs, will actually be handed out.
The government was put in an embarrassing position last year when it was revealed that the fund had rejected 67 per cent of the requests put before it in the previous five years.
The last federal budget increased the amount of money available for funeral expenses, but did not loosen the eligibility criteria, which have not been revised in decades.
The rules essentially exclude many modern-day soldiers who served in the Cold War and Afghanistan and impose a means test that says a qualifying veteran’s annual income must have been less than $12,010 per year.
Since the program is geared towards a dwindling population of Second World War and Korean veterans, the spending will be much less than what has been budgeted.
The budget office estimates the changes will mean an incremental bump this year of $3.6 million for the fund. It will plateau the following year and begin to decline.
"A slight increase in the number of projected mortalities is anticipated to increase the incremental costs to the Last Post Fund in 2014-15, followed by a steady decline in veteran mortalities and total costs to the fund," said the report, which was prepared at the request of the Liberals.
The fund has faced an increasing number of requests to bury poor ex-soldiers who don't qualify under existing regulations and it took to private fundraising to order to help in some cases.
Since it began canvassing for donations two years ago, the fund has used $93,000 to bury 29 ineligible vets.
In a fundraising letter, retired lieutenant-general Louis Cuppens, a past president of the fund, pointed out that Corrections Canada pays for the funerals and grave markers of dead inmates.
"A veteran is not a convict and deserves our gratitude," wrote Cuppens.
Often, the fund gets requests from municipalities looking to bury homeless veterans. In its recent throne speech, the Harper government promised to pay closer attention to ex-soldiers who end up on the streets.
Before the changes last spring, the federal government only contributed $3,600 toward the funerals of destitute ex-soldiers, a figure that is substantially lower than what some social services departments pay for the burial of the homeless and those on welfare.
The current entitlement can run up to $7,376, depending on a veteran's income. Other expenses, including the provision of a casket or urn, ceremonial services, death notices and transportation costs, also became eligible for reimbursement, according to the new report.
Joshua Zanin, a spokesman for Veterans Affairs Minister Julian Fantino, said 57 per cent of applicants will qualify for the maximum benefit under the program.
"Our government continues to work with stakeholders in order to ensure funeral programs continue to meet the needs of veterans and their families," Zanin said.
Analysts in the budget office want to see a full accounting of these "other" entitlements.
"At the time of the publication of this report, a complete list of eligible program expense items was not available," said the report. "(Veterans Affairs) indicates eligible expense categories will be clarified in the program’s policy, yet to be published."
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