Demystifying VA Effective Dates: Understanding the Basics of Disability Compensation

If a veteran has a medical condition that is presumed to be tied to service but files the claim more than a year after discharge, there are unique, effective date rules that apply.

One example is specialty own-occurrence, which defines disability as being unable to work in your medical specialty. This kind of effective date may require a change in rating.

What Is an Effective Date?

Many veterans claim entitlement to disability compensation because of injuries or diseases that occurred during or were aggravated by their military service. Compensation entitlements are based on medical evidence showing that the disability satisfies certain criteria.

The VA assigns each veteran a rating for each of their disabilities. When a veteran has multiple conditions, the ratings are combined to determine their overall efficiency (i.e., total disability rating). For example, a veteran with two conditions, TBI and back injury, may receive a combined rating of 80%. This rating takes 100 and subtracts the highest individually rated condition, TBI.

CBO examined the earnings patterns of working-age veterans who have a disability rating and found that, on average, they earn more annually than comparable veterans without a rating. The difference in earnings is largely due to lower labor force participation among those with a disability rating. This suggests that the extra income provided by the disability benefits helps keep some veterans out of the workforce. However, whether that is the only reason for the lower-earning trend is still being determined.

What Is an Earlier Effective Date?

An effective date is the day the VA begins to owe you disability compensation. The VA effective date can also be important for other benefits such as survivor pension and state property tax exemptions. If the VA incorrectly assigns an effective date, it may deny you the benefits you deserve.

The VA evaluates all evidence submitted with a claim to determine an effective date. It then determines when the disability first appeared and assigns that as the effective date. The VA looks for official diagnosis and treatment records to make this determination.

This is a complicated process; the VA must often correct it when assigning an effective date. Veterans can appeal the decision to the Board of Veterans Appeals when this happens. A law firm has successfully helped hundreds of veterans overturn improper effective dates, including those overturned on a higher-level review due to clear and unmistakable error (CUE). 

What Is a Later Effective Date?

Veterans are compensated for disabilities that develop due to, or were made worse by, an injury or disease incurred in service. This includes conditions presumed to be related to military service, even though they may occur after a veteran’s active duty.

Annual earnings are substantially lower for veterans with a high disability rating compared to those without a disability. This is largely due to lower labor force participation among veterans with a disability.

This is why it’s important to get your disability claim started as soon as possible. The fastest method is to apply through the VA’s Decision Ready Claims (DRC) program, which allows veterans to file their claims with their accredited Veterans Service Organization and typically gets their claim decided in 30 days or less. However, this option is limited and requires you to submit all the necessary evidence upfront. The next fastest method is to file a standard claim with a VSO.

What Is a Final Decision?

When the VA finally adjudicates a claim, it is a final decision. The effective date assigned to the claim determines when entitlement to benefits starts and, thus, the amount of retroactive disability compensation to which a veteran is entitled.

If a claim is won in a Higher-level Review (HLR) because of differences of opinion, the new effective date may differ from the previous one. In these situations, veterans can try to win a case by alleging clear and unmistakable error (CUE) in their HLR decision.

For claims for TDIU, the effective date determination is often driven by when the disability worsened. A veteran needs to get the earliest possible effective date in this situation. This will result in larger retroactive awards. Similar rules apply in claims for increased ratings, emphasizing the date of receipt of the claim. VA examiners will look at lay statements and medical evidence for these claims, including Compensation and Pension exams.