How Does VA Retro Pay Work

By Erika Rawes

The United States Department of Veterans Affairs, or VA, compensates military veterans for disabilities and grants pensions to those who are entitled. There are many military veterans and a great deal of paperwork so these benefits may take time to go into effect. To ensure the veteran is properly compensated, the VA provides retroactive pay for military veterans who apply for benefits.

Retro pay is compensation the veteran receives for the time period between the time the VA receives his claim for benefits and the time he actually receives the benefits. If the veteran applies for benefits within a year of retiring from the military, he receives retro pay from the date he retired from active duty service. The VA provides benefits on a monthly basis.

If a veteran files for disability benefits, the VA must either accept or reject her claim. If the VA accepts her claim, it also issues her a rating. Upon receiving a rating, the VA pays for the veteran only. If the veteran has a family, she must file for compensation benefits for her family separately. If she applies for benefits within one year of her retirement from the military, she receives retroactive pay from her date of retirement. If she applies for benefits later than one year after her date of retirement, she only receives retroactive pay from the date the VA receives her paperwork. For example, a veteran retires from the military on Jan. 1, 2009 and she applies for benefits on June 1, 2009. The VA accepts her claim and grants her a 50 percent rating on Feb. 1 2010. Because she applied within one year of retirement, she receives 13 months of retroactive pay. With a 50 percent rating, she receives $770 per month for 13 months or $10,010.

The veteran must apply for benefits for his dependents and for other forms of compensation, such as combat related special compensation (CRSC) separately. Dependent pay is a certain amount of money the VA pays for spouses and children of veterans. The amount varies based on the veteran's VA rating. CRSC pay is granted to veterans who can prove their medical injuries or illnesses resulted from combat. CRSC also varies based on the veteran's rating and based on his time in service. The same "one year rule" applies with these benefits. If the veteran submits the paperwork within one year of retiring from service, he receives retro pay from his date of retirement. If he applies after the one-year mark, he receives retro pay from the date the VA receives his application.

Dependent pay, for example, takes six months on average for the VA to process. When a veteran submits paperwork, she should know that her benefits may take time to go through but she will receive retroactive pay for the time she waits.

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