The effective date determines when VA disability payments start. The default rule under 38 USC § 5110 is the later of the claim-receipt date or the date entitlement arose, but five exceptions can move it earlier — the one-year-post-separation rule (38 CFR § 3.400(b)(2)), Intent to File (§ 3.155), the increased-rating look-back (§ 3.400(o)(2)), supplemental-claim continuity (§ 3.156), and liberalizing-law back-dating (§ 3.114). Getting the right rule can mean tens of thousands in tax-free back pay under 38 USC § 5301.
The effective date is the date the VA uses to start paying compensation. Under 38 USC § 5110(a), the effective date for an award of disability compensation is generally the date the VA receives the claim — or the date entitlement arose (the date the disability began or worsened) — whichever is later. Payments are made on the first of each month for the preceding month.
The rule has important exceptions in 38 CFR § 3.400 that can move the effective date earlier, sometimes by years. Understanding which exception applies is the difference between a few hundred dollars and tens of thousands in retroactive compensation.
The effective date is the later of the claim-receipt date or the date entitlement arose. However, under 38 CFR § 3.400(b)(2), an original claim filed within one year of separation from active service has its effective date set to the day after discharge. This “one-year rule” is one of the most valuable provisions in VA law and is lost permanently if the claim is filed on day 366.
Under 38 CFR § 3.155, if an ITF is filed before the completed claim, the effective date becomes the ITF date — provided the completed VA Form 21-526EZ arrives within one year of the ITF. An ITF filed January 1 with the completed claim filed September 1 lands the effective date on January 1, gaining eight months of back pay.
For a claim for increased rating on an already service-connected condition, the effective date is generally the claim-receipt date. But under 38 CFR § 3.400(o)(2), if the evidence shows the increase in disability is factually ascertainable within the one year before the claim, the effective date may be set to that earlier ascertainable date.
If the supplemental claim (VA Form 20-0995) is filed within one year of a prior decision, the effective date can relate back to the original claim date under continuously-pursued rules. Filed after one year, the effective date is generally the supplemental-claim receipt date — unless 38 CFR § 3.156(c) applies because the new evidence is official service department records.
Under 38 CFR § 3.114, when a new law or regulation creates a new basis for entitlement, the effective date can go back to the effective date of the law itself — but only if (a) the veteran files within one year of the law taking effect, or (b) the veteran has a previously denied claim for the same condition. This is the rule that powered PACT Act back-dated awards.
Back pay (retroactive pay) is the total compensation owed from the effective date through the date benefits are awarded. It accrues monthly and is paid as a single lump sum, typically within 2-4 weeks of the decision, via direct deposit to the account on file.
If the combined rating is 30% or higher, dependent adjustments under 38 USC § 1115 are included in back pay if dependents were on record as of the effective date. If dependents were added after the decision, file a separate request to add them and trigger adjusted back pay.
The date the VA uses to begin paying disability compensation. Under 38 USC § 5110(a), the effective date is the later of the date the claim was received or the date entitlement arose, with exceptions in 38 CFR § 3.400 for original claims filed within one year of separation, ITF-protected claims, supplemental claims, and liberalizing-law claims.
Under 38 CFR § 3.400(b)(2), if a veteran files an original claim within one year after discharge from active service, the effective date is the day after separation — not the date of the claim. Filing on day 366 forfeits this protection and the effective date snaps forward to the claim-receipt date.
An ITF under 38 CFR § 3.155 reserves the effective date for one year. If the completed VA Form 21-526EZ is filed within that one-year window, the effective date is the ITF date instead of the claim-receipt date.
38 CFR § 3.400(o)(2) — if the evidence shows the increase in disability is factually ascertainable within the one year before the claim was received, the effective date may be set to the date the increase is factually ascertainable, not the claim-receipt date.
Under 38 CFR § 3.114, when a new law or regulation creates a new basis for entitlement (PACT Act presumptives, for example), the effective date can go back to the effective date of the law change — but only if the veteran files within one year of the law taking effect, OR had a previously denied claim for the same condition.
No. Under 38 USC § 5301, VA disability compensation — including retroactive back pay — is exempt from federal income tax. Most states also exempt it from state income tax.