How Does VA Disability Back Pay Work?
VA disability back pay is a one-time, lump-sum payment to a veteran to compensate them for prior months (or years) in which they were entitled to VA disability compensation but no payments were arriving.
There is typically a gap, sometimes a large one, between when a veteran raises or files a claim and when the claim is granted. VA disability back pay is any accrued amount from the “effective date” (or start of the claim) to the time when the VA makes a decision to grant the benefit award. Once back pay is paid out, disability payments continue on a monthly basis.
The concept may seem straightforward, but VA back pay is an area where veterans have many questions. How far back does back pay go? How is VA back pay calculated? Is back pay taxable? We’ll break down these common questions in the sections that follow.
How Far Does Back Pay Go?
The amount of back pay a veteran receives depends on multiple factors:
- The effective date associated with an approved VA disability claim
- The associated VA disability rating
- The VA compensation rate at the time
The effective date is when back pay starts. In most cases, this will be the month following the date when the veteran submitted the VA disability or increased rating claim. Back pay generally does not date back to when the condition actually started, or when military service ended, unless a veteran filed a claim then.
The first year of leaving military service is significant for VA disability claims. If a disability claim is submitted more than a year after the veteran leaves the military, the effective date and back pay are based on the date the claim was received. In contrast, if an approved disability claim is received within a year of a veteran leaving service, the effective date begins immediately after the veteran left service. Missing the one-year window to file a claim after leaving service can leave thousands of dollars of back pay on the table.
The U.S. Department of Veterans Affairs (VA) website offers some helpful examples to illustrate how effective dates are determined.
How is VA Disability Back Pay Calculated?
VA disability back pay is a sum of the monthly payments due to a veteran based on their VA disability rating. You don’t need a complex VA disability back pay calculator to determine the amount. Instead, you can follow these steps:
- Calculate the number of months between the effective date and the grant of benefits;
- Determine your new rating, or rating increase during that waiting period. The rating will be based on the severity of your symptoms;
- Determine the monthly monetary value of your rating during the months when the claim was pending. Each rating corresponds to a monetary value, which increases every year;
- Multiply the monthly monetary value of your rating by the number of months the claim was pending to determine the back award; and
- Make sure to account for other benefits you are receiving that might offset the back award.
Is Back Pay Taxable?
VA disability payments, including back pay, are non-taxable.
When Does Back Pay Become Available?
The VA strives to ensure that any veteran due back pay receives it within a couple weeks of claim approval, either through direct deposit or a paper check. Make sure the VA has your correct address and bank information at all times.
Get the Back Pay You Deserve
At Vets National Advocates, we help veterans and their survivors develop their strongest claim or appeal in order to get the support they need and deserve. We use our expert knowledge to navigate the complexity of VA disability claims and benefits. Contact us today for a free consultation using our online form or call 1-877-777-4021.