Veterans Affairs is ending clawbacks for two more types of income support benefits, in the wake of last spring's federal court decision that said the federal government shouldn't be deducting from veterans' long-term disability benefits when they also receive a disability pension.

Veterans Affairs Minister Steven Blaney announced Wednesday that effective immediately, veterans will no longer have the amount of their earnings loss benefit and their Canadian Forces Income Support benefit reduced because they're also receiving a disability pension.

Blaney told reporters that the government is going "even farther than what the court required," saying the Harper government had "no obligation" to make today's move but it is committed to "harmonizing" its system and ending deductions for complementary programs.

The changes will cost the government $177.7 million over the next five years and are expected to affect an estimated 2,500 veterans and families.

Blaney also said the government is working to change legislation so the war veterans allowance won't be clawed back in the future.

In July, Defence Minister Peter MacKay ended the deduction for most disabled soldiers, but it took a special cabinet order – passed just recently – to get the measure enacted for those affected under the veterans affairs system.

New Democrat veterans critic Peter Stoffer said he was pleased with the decision, but irritated by the government's blatant politicking -- including the claim it has "worked quickly" to help affected veterans.

The Conservative government could have implemented Wednesday's changes years ago, Stoffer said.

"It's hard to criticize them when they do the right thing, but these problems have been around a lot longer than the current government and it is something they should have done when they came to office," he said.

Negotiator working on class-action settlement

Veterans have been complaining about the clawback of various benefits since a new Veterans Charter was introduced in 2006.

A group of veterans won a class action lawsuit in Federal Court last May, arguing that it was unfair to reduce long-term disability benefits by the amount of the monthly Veterans Affairs disability pension.

When MacKay and Blaney said they would not appeal the decision, they said they would move to make changes to other benefits not directly involved in the court decision so they weren't clawed back either.

A government-appointed negotiator, Stephen Toope, the president of the University of British Columbia, is working with lawyers representing the 4,500 veterans on a settlement for the class action lawsuit.

The settlement could run as high as $600 million, depending on the cut-off date negotiated.

"We needed to seek clarity to make a decision on a sound judicial basis," Blaney told reporters. "We're looking forward to his recommendations."

It's not clear whether Wednesday's changes will also be made retroactive. For now, revised monthly payments will start in November, and additional cheques will be issued to make up for the clawback in October.

"All that is left for Minister Blaney to do is address the retroactive money owed to these veterans back to 2006, when the (New Veterans Charter) was enacted by Parliament," said Ron Cundell, a former sergeant and disabled veteran who runs the website veteransvoice.ca.

Wednesday's announcement will have a major impact on modern-day soldiers, Cundell said.

"The Afghan vets who were severely injured and are unable to work will now be able to live a more financially comfortable life."

Stoffer called on the government to settle a separate lawsuit launched by members of the RCMP who've also had their disability pensions clawed back.

The government should also halt deductions for all federal employees whose Canada Pension Plan disability benefits are deducted dollar-for-dollar from their superannuation payments, he added.

with files from The Canadian Press