VA disability back pay is any money owed to a veteran once his or her compensation application is approved – the allocation of back pay allows the VA to compensate the veteran for all compensation that has accrued since the initial disability claim was submitted. Generally, the longer the VA takes to approve your disability claim, the more back pay it will owe you when you are approved. For some veterans, their resulting back pay ends up being a substantial amount.
Once your VA disability retroactive pay is calculated, you should receive it all in one lump sum, while all future VA disability compensation will be paid monthly. The VA makes a tremendous effort to ensure that any veteran approved for back pay receives it within 4-15 days of that decision, either through direct deposit or a paper check.
What Is an Effective Date?
Your effective date is the date the VA will use to determine when exactly your back pay should start. There are a couple of different ways that the VA can determine your effective date. It can use either the date on which you submitted your VA disability benefits claim, or if your condition developed a long time before, the VA can choose to grant you back pay all the way back to the onset of your medical condition or physical disability.
If you wait to apply for VA disability benefits until a year or more after you’ve already separated from military service, it’s highly unlikely that the VA will extend your back pay to the time of your injury or disability onset. And if you apply for your disability benefits within a year of military discharge, the VA generally will only pay back benefits from the time of your discharge date.
The effective date for a disability that was either directly caused or made worse by military service is typically aligned with the later of the following choices: the date the VA received your claim or the date of onset of the injury or medical condition. In most cases, if the VA believes, based on the information presented in your claim, that your disabling condition is related to your military service – this is known as presumptive service connection. The VA will consider your effective date as the date you received the injury or medical condition, as long as you apply for compensation within one year of being discharged.
There are some exceptions when the VA might use a different effective date from the two usual options. For example, there are requests for revision based on a “clear and unmistakable error” or requests from recently discharged service members who apply for VA disability benefits within a year of their discharge. If an inaccurate effective date were applied in an earlier review based on a mistake on the VA’s part, the VA will adjust the effective date to represent the effective date that would have been assigned if the error hadn’t taken place.
How is VA Disability Back Pay Calculated?
Your VA disability back pay will be unique to you and your determined employability. There is no set amount a disabled veteran is entitled to receive. The VA will use several different factors when calculating your disability back pay. First is your effective date. The second is the specific VA disability rating assigned to your condition. In most cases, the higher the VA disability rating you receive, the more the VA will owe you in back payment. The VA also will consult its historical disability compensation tables, especially if it’s calculating back payments over multiple years. This allows the VA to effectively factor in cost of living changes from year to year.
It’s important to note that many medical conditions and disabilities change over time, sometimes either improving or worsening. If this is the case, the VA may assign a staged disability rating to your condition, which allows the VA to consider how a disability changes over time as it evaluates your compensation claim. This sometimes can make the process of determining back pay a bit more difficult since it must be calculated relative to the severity of the condition from year to year.
Is My VA Back Pay Taxable?
VA disability benefits and therefore back pay are a tax-free benefit to any U.S. disabled veteran.