When the VA grants or increases a rating, it pays from the effective date, usually the date it received your claim or intent to file, not the decision date. Everything between the two arrives as one retroactive payment. Payment starts on the first day of the month after the effective date, and rates step up every December 1. This walks through that month by month.
| Rate period | Months | Monthly owed | Subtotal |
|---|
How VA counts back pay
Start month. If your effective date is March 14, pay starts April 1 (38 CFR 3.31). An effective date the day after discharge is common when you file within a year of separating.
End month. The retro covers every month up to the one before your first regular payment. VA pays each month on the first business day of the next month, so the month of the decision is usually paid as your first regular payment.
Rates. Each month is paid at the rate in effect for it. Rates rise every December 1 with the Social Security COLA, so older months are paid at lower rates.
Dependents. The dependent amount applies from the effective date only if VA had the dependent information then (or you added it within a year of the decision). Dependents add money only at 30% and above.
Frequently asked questions
How is VA back pay calculated?
VA multiplies each month between your effective date and your decision by the rate in effect for that month. Payment starts the first day of the month after the effective date, and rates change every December 1. For an increase, VA pays the difference between the new and old rate for each month.
How long does VA back pay take to arrive?
Usually within about 15 business days of the decision for direct deposit, often sooner. It can take longer when VA must coordinate an offset with DFAS for military retirees or recoup separation pay.
Is VA back pay taxable?
No. VA disability compensation, including the retroactive payment, is tax-free. If you paid tax on military retired pay for the same months, you may be able to amend those returns.
What determines my effective date?
Usually the later of the date VA received your claim (or intent to file) and the date your condition began. If you filed within one year of leaving the service, it can be the day after discharge. Your decision letter states it.
Check it against the official source
- VA compensation rates (VA.gov Official 2026 Rates (effective December 1, 2025))
- VA: Past rates (earlier years)
- 38 CFR 3.31: Commencement of the period of payment
- VA: Effective dates for disability claims
This is an estimate for planning. For a binding answer, talk to your finance office or a free Personal Financial Counselor at your installation (find yours).