Retroactive pay, commonly called back pay, is the compensation you are owed from your effective date up to the point VA begins regular monthly payments. The effective date is usually the date you filed your claim or the date your entitlement arose, whichever is later. For claims filed within one year of separation from service, the effective date can go back to the day after your discharge. Back pay can be significant, especially if your claim took months or years to process. VA calculates back pay by determining the monthly rate you should have been paid for each month since your effective date and totaling those amounts. If your rating was staged, meaning different percentages applied during different periods, the calculation accounts for each stage separately. If you added dependents during the back pay period, those changes are also factored in. Back pay is typically issued as a lump sum payment separate from your first regular monthly payment. If you have an attorney or accredited representative who worked on contingency, their fee may be deducted from the back pay. VA will notify you of the total retroactive amount and any withholdings. If the back pay calculation seems incorrect, request a detailed accounting from VA showing how the amount was determined.
Note: This article references sections of the VA's M21-1 Adjudication Procedures Manual. The VA periodically reorganizes the M21-1 and section numbers may have changed since this article was written. For the most current section references, visit the VA's public M21-1 Web Automated Reference Material System (WARMS).