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VA Back Pay, or Retroactive Benefits

  • (1) What is VA back pay, or retroactive pay?
  • (2) What is an effective date and how does it impact back pay?
  • (3) SPECIAL EFFECTIVE DATE SITUATIONS
    • Filing a VA claim within one year of service
    • Increased ratings and staged ratings
    • VA rating reductions
    • Changes in Veterans Law
    • Nehmer claims for Agent Orange exposure
    • Dependency and Indemnity Compensation (for surviving dependents)
    • Clear and Unmistakable Error (CUE)
  • (4) How does VA calculate back pay?
  • (5) Is there a limit to the amount of back pay a veteran can receive?
  • (6) Compensation Offsets
    • Retirement pay (or retired pay), separation pay or severance pay, VA pension
  • (7) Concurrent Receipt for retirement pay
  • (8) VA Pension offsets
  • (9) Appealing effective dates
    • What if you disagree with your effective date?
    • What kinds of evidence will you need?

Video Transcription.

Jonathan: Good morning. I’m Jonathan Greene with Chisholm Chisholm & Kilpatrick, and with me today is Emma Peterson and Linden Nash. We’re going to be talking about VA Back Pay. So Emma, what does it mean when we say VA Back Pay, also known as Retroactive Benefits?

Emma: Sure, so we’re talking about the amount of money that VA will compensate a veteran, the lump sum, from the date they filed a claim, the date that their effective date is for that disability until the date that disability was actually granted. Everyone knows by now that VA takes a little bit of time to get around to processing claims, so you’re not just going to walk down to the regional office, file your claim, get granted that day. It may take months, years, five years, ten years to actually get what you’re looking for. So VA will pay you the monthly payment that you were owed for that number of years in one lump sum payment, and then pay you a monthly payment going forward.

Jonathan: Okay, so if we could imagine a universe where you did file a claim and were granted that day it’s getting the money that you would have obtained in that mythical universe.

Emma: Correct. It’s the money VA would have been paying you anyways had they granted you the claim the minute you walked into the RO.

Jonathan: So we’re throwing out words like effective dates. Now, Lindy what does that mean? What is an effective date and how does it impact back pay?

Linden: Sure, so an effective date is basically the day that your compensation begins, and so that really affects back pay because depending on the day of your effective date that affects how many months, how many retroactive benefits you’re going to get. As Emma was saying it doesn’t often occur where you walk into the RO and file a claim and it gets granted that day. Often it takes months or years so that effective date which could have been a month or a year ago really dictates how much money you’re going to get.

Jonathan: So, when you’re evaluating claims the effective date you could even argue is more important than the actual rating in some cases in terms of what they’re going to be up to, what they’re going to be receiving as far as compensation goes?

Linden: Definitely.

Jonathan: So, effective dates is a whole thing and we’ve done Facebook lives about it and determining effective and arguments you can make to get an earlier effective date. So, what does VA typically use to decide the effective date?

Emma: Sure, so an effective date can be typically sort of two things. One, the date you filed your claim or two, the date entitlement to that claim arose. So what that means is for all intents and purposes the date you got diagnosed is the date the disability appeared, but it’s going to be one of those two dates and for most people, it’s the date they file their claim.

Jonathan: Okay. So, if they get out of service and file a claim within one year, what is going to be an effective date then?

Emma: That’s an exception to the rule. The effective date would be the date you were separated from, a date after you were separated from service.

Jonathan: So, if you just got out and know that you’re going to be filing a disability claim, it’s important to get it in that first year so you can get it all the way back from the day of discharge. So, what about filing for increased ratings? You’ve already been found service-connected, they’re already giving you, they’re already paying you at a certain disability rate but you feel you’re entitled to more and you apply for what’s called an increased rating. When is the effective date in that scenario?

Linden: So, I guess it depends. There’s kind of different circumstances but basically if you’ve had let’s say you have a 30% rating for PTSD and you’ve had it for many years, and then you want to file a brand-new claim saying that your symptoms have increased in severity, so typically the effective date would be that date of claim, so that new claim that you’re filing may be the effective date. However, there are certain other circumstances where you could get it back even farther. Let’s say you filed for service connection and then you’re granted service connection and automatically assigned to that 30% rating. You can ask for an effective date back to the original date of claim.

Jonathan: So Emma, while they’re deciding what rating you should obtain and during the course of that as you mentioned they sometimes take months and even years, your condition worsens, how is that treated?

Emma: So, during an active claim, you’re talking about. The day that your condition worsens would be the day that you will be assigned that increased rating. Like Lindy was saying if you file an increased rating claim, and no appeal pending just file it at the RO, if they can figure out that your disability worsened a year beforehand that’s going to be the effective date, otherwise they’ll be the data claim. But if you’ve got an appeal going VA can assign you it’s called stage ratings, depending on how severe your disability gets over that appeal period. That will affect your back pay because you might have a period of time in which VA is saying, “Okay, you’ve got a 10% for five years and then we’re going to bump you up to a 30% for two more years.” So the math can get a little tricky when trying to figure out what your retroactive pay is going to be, but that certainly is a possibility.

Jonathan: So, we talked about the condition worsening. What if VA finds that the condition has gotten better and they do what’s called reduce your disability rating? What is the effective date for those reductions or how does that work generally?

Linden: Yes. First of all, before VA can reduce you they must give notice and that’s a really important thing to know. They have to give you notice that that reduction is going to happen and they also have to prove that your condition has materially improved I think there was just a recent decision from the CAVC about that as well, so you must show that or the VA must show that your condition has materially improved, and then based on that it kind of depends. I’ve seen some decisions where they base the effective date on an examination, maybe they have something really they find to be proof that your condition has materially improved. So again, it depends but it can be the date of a decision as the effective date as well.

Jonathan: Okay, thank you. So, just a pause for our audience just a quick second, just reminds everyone that we’re Chisholm Chisholm & Kilpatrick. You can find us at cck-law.com and today we’re talking about back pay also known as retroactive benefits. So, let’s talk about changes in the law. As happens often there is a change in the law that could be beneficial to one of your clients. How does that impact effective dates? So if there’s a change in the law that makes a previously ineligible veteran now eligible for benefits, how does that work about when that would take effect as far as effective dates are concerned? You want to take that one Emma?

Emma: Sure, so just generally speaking because there are lots of unique circumstances out there, but generally speaking if the law changes and you file a claim within a year of that change your effective date will be the date of the law change. Okay. So, it won’t be the date you filed for the date of the law change that’s if it’s within a year. Otherwise, if it’s beyond that year change, it’s going to be effective the date you filed that claim whether it be a service connection claim or increased rating claim. One tricky circumstance that I can think of in which something might change, the law might change while you have an appeal pending has to do with the diagnostic code. So, if those rating criteria change and you can be evaluated under either set, the parameters might get more stringent or easier, VA is supposed to use what’s more beneficial to you.

Jonathan: Okay. And so, an example we think of is a list of presumptive conditions for exposure to Agent Orange is updated and more conditions are added. Do we want to say a quick word about something that we often hear about which is Nehmer claims, which is kind of its own separate thing but somewhat related?

Emma: Sure, so Nehmer was a class action that resulted in a compromise agreement about how this is going to work and it kind of flows from that change in law. If you are an Nehmer class member and if you meet certain requirements you have to be in boots on the ground Vietnam Veteran, and you have to have had a claim filed between I think it’s 1985 and 2010, it could be an actual claim and inferred claim, a claim with a diagnosis for are now presumptive condition and the record might work. But if you had something going on and you meet the requirements for the Nehmer class numbers then your effective date is going to be that original claim. So, in theory you could file something now that you had a claim going in 1987. You might get an effective date for your now presumptive CAD or coronary artery disease all the way back. So, it’s important to keep an eye on if you have service in Vietnam. This is a lot of veterans that it covers and it’s procedural a little tricky, so VA doesn’t always do it correctly. So it’s important to keep in mind and speak with your VA so or your credited rap or your attorney about what to do about that type of effective date.

Jonathan: Exactly. It is kind of complicated and it is outside the norm of our claims process but it’s important to keep in mind if you do have one of those presumptive conditions to consider Nehmer and mention that to your representative because if there is a way for those that condition to be attached to a previously pending claim. How about DIC, Dependency and Indemnity Compensation, how do effective dates work for that?

Linden: Sure.

Jonathan: Or would you also explain what that is?

Linden: Yes. So, we often refer to it as DIC benefits and that is a benefit for the surviving spouse or child or dependent parent after a veteran has passed away. So typically, I believe it’s just under $1,300 a month and that is a benefit that goes to the survivor as I just said, and basically, the effective date works it’s given the first day of the month after the veteran passed away. So that’s usually how the effective date for DIC benefits is calculated.

Jonathan: And it’s filed, when does it have to be filed?

Linden: After the veteran has passed.

Jonathan: Right, within a year of their passing exactly.

Linden: Yes, right.

Emma: If you don’t file you can file for DIC benefits after a year, but the effective date is not going to be the data to veteran’s death at that point. It’s going to be the date you file that claim.

Jonathan: And oftentimes you’re trying to establish that the death was causally related to their active duty military service or a service-connected condition. So, we’re talking about a lot of exceptions here and we are talking about a lot of stuff that is sort of confusing even for advocates who have worked in this area for a while, so forgive us but we’re trying to hit a lot of different stuff because it’s all very important on how it impacts the amount of money that you could be entitled to. So, to that end let’s talk about CUE. So what’s known as CUE, Clear and Unmistakable Error, how does that work and what does that entail?

Emma: If VA makes, I’m just going to hit this really simply because CUE should be a whole other subject matter I know that we have posts about it on our website. You should check it out if you’re curious for more information, but if VA commits to CUE your effective date could then need that date. If there’s a rating decision from a long time ago and we look back at it now and there’s a clear and unmistakable error, then you could be awarded service connection as of that date. It really can open up the claims dream, open up the appeal period and get you a large retroactive sum.

Jonathan: Yes, and I think we often hear from clients who say, “Well, can’t we just file that this was a CUE back in the day?” This is something that is I would say it’s rare. It has to be this with undebatable error with the facts known at that time. So if they’re not that easy to establish although it is something important to consider because we’ve seen some that the VA has found that there was a CUE in a previous decision and it can go back decades, which will entitle you too, a lot of money. So let’s kind of talk about the money, because we talked about really establishing effective dates. Now, how does that really impact what the veteran gets in their bank account? So as we know you get assigned a certain rating and that corresponds to a dollar amount depending on things like whether they are have a spouse, have dependents but generally speaking a rating is going to correspond to a certain dollar amount per month, and that rating does change. So, how do they calculate it when it’s the effective date is going back for a long period of time? You want to take that Miss Nash?

Linden: Yes. Actually you can go to the VA website and they have charts and tables of the compensation rates for I guess, at least for the last decade, and you can see how the rates have really changed and as Jon kind of alluded to it is based on cost-of-living adjustment, as we continue on cost of living does increase. So you can look at the benefits and see the changes in the table. For example back in 2011, I believe that 10% rating for a veteran with no dependents was about $127 and now in 2018 or for 2017 it’s about $136. So it does increase and that kind of shows you the small increase throughout the years. So what VA will do is that they’ll look at the different benefit charts and tables to see what the payments were back then and they will calculate depending on your effective date the award that you’re owed based on the change in rates.

Jonathan: And so, it’s you don’t simply look at if your claim is pending for 10 years, you don’t simply look at today’s rate and say, “Okay, ten years, that’s 120 months today’s rate times 120 months it should equal that.” You have to look at the historical rates because they will go down, and you get paid what you would have been paid then. No interest is factored on, nothing gets added to it. So if your claim goes back to the 1950s you’re getting 1950s dollars for that time. So, Emma is there a limit to what they can get?

Emma: No, there is no limit. It might be a little bit longer to process if it’s a really astronomically large award. We certainly seen some of our clients get very large sums but it takes a little bit longer in terms of processing internally, but there is no limit. There’s no congressional or regulatory limit on the amount of back pay. So if for whatever reason you have an appeal that’s been pending for 20, 30, 40 years however long it takes to get the satisfaction that you think you deserve or you reach the end of your appeal process and decide all right, that’s it. You could get back pay for that entire period, it just it depends on what you have going on your unique claim situation.

Jonathan: So, let’s talk about some of the offsetting rules and before we get a little bit into this I just wanted to say we’re not going to go to too deep into the offsetting rules, it’s a little bit involved. You can get into tax implications and things like that but I would like to invite our audience to, I think that we’re going to put up a poll, and if you’re interested in hearing more about the offsetting rules we could do a whole separate Facebook live that would focus on the details of the offsetting rules and perhaps get some of our in-house experts to talk about that. That probably wouldn’t be the three of us, but—

Emma: Kerry Baker.

Jonathan: But we will—we want to mention them because they’re important and they do have significant impacts on the amount of compensation you receive. So, generally speaking there are some situations where the amount of compensation you could receive as back pay is going to be offset against something else. What does that mean? Let’s think about it in terms of the general idea that the government doesn’t like people to double-dip.

Emma: Right. So, a couple situations in which they don’t allow double-dipping have to do with whether you receive separation or severance pay, retirement pay is another situation and pension. Those are the three big situations in which your disability pay might be reduced or offset, recouped, basically in a nutshell, you get less money a month. That’s what really comes down to is what we’re looking at.

Jonathan: And so, you mentioned separation or severance pay. You got $20,000 in separation pay, you’re now entitled to $100,000 and retroactive benefits, they’re going to take– you’re going to receive 80. Is that generally how it would work?

Emma: Generally how it would work, just bare bones generic situation.

Jonathan: Not getting into who’s paying you and how it works, where the checks are going to come from because that’s a whole other thing. Because it can be a complete exercise and futility sometimes to know how to chase down where the money is going to be coming from, once you get into some of these offsetting situations. But generally speaking it’ll be offset if you did receive separation pay, your compensation will be offset. For the most part true from severance pay although there is the limited exception to post 9/11 combat-related compensation. We want to talk about a concurrent receipt for retirement pay?

Emma: Right, so do you want to take that Lindy? All right. There sort of two situations in which you can get concurrency meaning get both your retirement pay and also your full disability pay without getting one of those offset by the other. So if you are a retired veteran you have 20 years of service retirement at least and that your rate at least 50%, generally speaking, you’re going to get both. You’re going to get your retirement pay and your VA pay. Then the same thing also applies for those that have received combat-related disability. So if you’re rated for a combat disability, sorry, disability received in combat, you’re entitled to have to apply with your branch of service to also receive that pay and not have it offset by your disability pay. So it gets tricky like Jon said in terms of the tax implications and where the checks are coming from, but just know there are situations in which you can get both VA disability pay and your retirement benefits.

Jonathan: Okay. Yes, and that was actually a good summary. Generally speaking, there are situations where you’re going to get both, there are situations where one is going to be offset. But if it’s a combat-related or if you’re at 50% or higher you should be entitled to both but you really need to have somebody kind of dig in as Emma said where these checks are going to be coming from because that is becomes very complicated. Something that’s a little bit easier to understand is a pension. So veterans are entitled to a pension but we often see that a veteran is receiving a pension and then we get them service-connected for something, and then they’re receiving compensation. So, what happens then? They’re entitled to a certain amount for a pension. They’re entitled to a certain amount for compensation, how does that work?

Emma: So, you’re entitled to receive the greater benefit, easy simple as that. So, it’s just important to look at keep an eye on how much you’re getting a pension and then once you start receiving compensation which one’s going to result in a greater net benefit to you.

Jonathan: It’s just important to keep in mind. You’re receiving pension X amount of dollars a month and then you get excited because you became service-connected. It doesn’t just get added on top of what you’re receiving a monthly pension, you’re going to get the greater. So, is the back pay calculated differently when you’re one is getting DIC benefits?

Linden: I don’t believe so. Basically as we reiterated from before, DIC is that benefit as long as the veterans death is service-connected the surviving child, spouse, dependent parent will get that payment going forward. So the first day of the month after the veteran passed, which is different than accrued benefits which would be more retroactive payment to the passed of when the veteran filed the claim. Otherwise no, it is not calculated differently.

Jonathan: Right. The same mechanics, something that does make it a little bit simpler as you mentioned it’s generally speaking is going to be that rate, that $1,300 that’s you don’t need to mess with ratings and all that, but the same rules apply as far as the monthly benefit going back to whatever the effective date would be. So what happens if you disagree with something like an effective date?

Linden: Yes, so it kind of depends on where you are in the claim stream but assuming that you file a claim and you get a rating decision and they give you an effective date that you may not agree with, you must file that notice of disagreement within a year. So filed a notice disagreement, explain why you believe earlier effective date is warranted and I keep that issue on appeal because that’s really important.

Jonathan: I know that this is going to depend but what evidence would we recommend submitting?

Linden: Yes, so again, it does depend on anything kind of retrospective in nature. If you have a great private opinion from a physician that can speak to, maybe he or she has been treating you for 10 years, and they can speak to the severity of your condition over the last 10 years that’s helpful, really anything kind of speaks to your severity in the past, so that’s great assuming that the claims stream is open and that you have filed your effective date previously, excuse me, your claim previously.

Jonathan: Yes, well I’ll say that earlier effective data arguments as some of these examples kind of show can become very legally confusing and are often based on a legal argument rather than just simply submitting evidence. However, as Lindy mentioned retrospective opinions, things like that, they can all come into play, but all of this is just to give everyone an overview and some things to keep in mind. As we mentioned previously if you would be interested in hearing a more comprehensive discussion about some of these offsetting rules because it can become really important, please feel free to take our poll and let us know one way or another and otherwise, we’re always welcome to feedback. So if there’s other topics you want us to hit, just reach out. Again, we’re Chisholm Chisholm & Kilpatrick, you can find us at cck-law.com and thank you very much for joining us. That’s all we have for today.

Emma: Thanks.

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