What Is VA Disability Back Pay And How Do I Qualify In Houston, TX?

In the course of applying for VA disability benefits, the issue of “back pay” may be part of the discussion. Maybe you know someone who received it, or you may discuss it with a VSO or disability attorney. Receiving back pay—and how much you receive—will depend on the date of your application, and when you begin receiving benefits.

What Is VA Disability Back Pay And How Do I Qualify In Houston, TX?

The Effective Date

The VA defines this as the later of two dates:

  • The date of your claim filing
  • The date that your disability reveals or escalates

Most claims use the date you filed your claim. The second date is usually when a veteran files for an increase in ratings. In that case, the effective date is then the date when the disability escalates, not the original date of the claim filing.

There are occasions when an effective date may be earlier, but not much. They are:

  • Recently discharged veterans, depending on the date of discharge and the date the disability either manifests or escalates
  • Claims for an increased rating
  • Agent Orange Exposure claims, since there are special rules that apply because Agent Orange exposure is a presumptive service-connected condition.

Once these dates are established, the VA begins the claims process.

When Disability Back Pay Is Awarded

Because the VA is notorious for taking years to award benefits in some cases, the agency awards a lump sum of “back pay,” and you’ll receive monthly benefit thereafter.

Back pay is the collective amount of the payments you would have received if you were awarded benefits immediately.

For instance: you applied for VA disability benefits on January 1, 2015, but didn’t begin receiving monthly benefit payments until January 1, 2019. This means that although you begin receiving payments on January 1, 2019, you’re also entitled to benefits during the period where you waited for the VA to begin disbursement. Therefore, back pay would be the four-year sum of your monthly benefits from January 1, 2015 through December 1, 2018 until your regular monthly benefit payments begin on January 1, 2019.

It’s also possible that you could receive back pay when you’ve appealed a decision and the VA subsequently rules in your favor. Back pay may also be awarded if your condition worsens and the VA increases your monthly benefit payments. You’ll also receive a lump sum of the increased amount after the new ruling, based on the date your condition escalates.

A Claim Must Be In Writing

It may sound a little odd to mention, but some veterans may believe they’ve filed a claim because they’ve discussed it with a VSO or an adjudicator. All claims must be submitted in writing, and you don’t have a claim until you do.  The VA does not do a good job of notifying veterans that they may have a claim. The effective date of your award is always on, and not earlier, than the date of your written claim.

Don’t Re-Apply After Denial—Get Help With Your Appeal ASAP

What some veterans do after they are denied benefits is to re-apply all over again. Don’t do that—you could lose thousands of dollars you’re actually entitled to. The VA works on the effective date, or the date that they receive your application. If you start over with a new application, the effective date, and could reduce or eliminate any back pay you could have received.

If your application is denied, it’s important to step up your game and get help with your appeal immediately. Whether you applied before your discharge date, within a year of discharge, or when you first began to need benefits, starting over with a new application wipes out your original application and starts the process over.

Using the previous example—if you applied on January 1, 2015 and your claim is denied, through the eventual appeal, you might receive a four-year sum of back pay.

But if you re-apply on January 2016 and are eventually approved, you would lose an entire year of back pay.

Getting help from a disability law attorney will help you navigate the appeals process and increase your chances of getting the benefits you need and deserve.

We Help Houston Veterans

Getting VA disability benefits is a long, arduous process that takes patience as well as understanding the law. William Herren is a disability attorney who has helped more than 4,000 Houstonians get the benefits they deserve, including veterans. Call The Herren Law Firm today at 713-682-8194 (or use our online contact form) to schedule your free consultation. There’s no obligation, and we’ll take your case on a contingency fee basis, with no up-front charges. You don’t owe a fee until we win your case.

What Is The VA Service-Connected Disability Rating System?

During the process of applying for your VA disability benefits, you may have heard about the VA’s rating system.  The VA Schedule of Ratings Disabilities (VASRD) is a system that the VA uses to determine a veteran’s percentage of disability. The percentage determines how much a disability decreases your ability to function as well as your overall health. It’s a fair and consistent system for compensating disabled veterans for the same condition.

What Is The VA Service-Connected Disability Rating System?

How It Works

Your first step is to assemble your claim and submit it to the VA. Once the VA determines that your disability is service-connected, they assign you a rating.  These ratings are based on the impact of your earning capacity in civilian occupations. The rating is used to determine the amount of disability compensation paid to you monthly to compensate you for the loss of earning capacity due to your service.

The VA uses medical information you supply in your claim. This can include military and civilian medical records, as well as things like test results. Also used are findings from a VA Claim Exam (also called “compensation and pension” or “C&P” exam) and any other information the VA gathers, such as from federal agencies. The VA issues ratings in even, 10% increments from 0% to 100%. Multiple ratings are added and rounded to the nearest 10% (up or down) using the criteria set out in the VASRD.

Different conditions have different ratings, based on their severity. If you have more than one disabling condition, the VA uses their Combined Ratings Table to help determine your percentage of disability. This means that if your different conditions have percentages that add up to 100% or more, your final, rounded percentage will not be equal to 100% or more.

What If I’m Rated At 0%?

This means that although you have a condition, it doesn’t affect your ability to function. You won’t receive any disability payments, but you may still qualify for priority health care as well as other VA benefits. More than one 0% disability rating for different conditions may give you a 10% rating.

However, even with a 0% rating, you have established that your condition exists, and that it’s service connected. It is a “foot in the door” for later.  Should your condition worsen to the point of disability, you can file a claim to increase your rating.

You may also be eligible for outpatient dental care and more affordable life insurance within the first two years of your rating. There may also be state benefits available for veterans at 0%.

Confused About The VA’s Rating System? Herren Law Understands It

If you’re not sure what the rating system means to you, don’t try to decipher it yourself. William Herren is a Houston disability attorney who has been helping veterans through the VA’s system for more than 20 years. We understand how the VA works, the VASRD, and how to get your claim through their process as efficiently as possible to give you the best chance of approval.

Call The Herren Law Firm today at 713-682-8194 (or use our online contact form) to schedule your free consultation. There’s no obligation, and we’ll take your case on a contingency fee basis, with no up-front charges.

Taxation of Disability Benefits in Houston, TX

One of the less-discussed parts of getting disability benefits is what happens when it becomes tax time. Do you pay taxes on these benefits? The answer depends on what type of benefits you receive, and how you receive them.

Long Term Disability Insurance

Taxes on LTD insurance comes down to one question: who paid for it?

If your disability benefits come from a policy you paid for with after-tax dollars, as a rule, your benefits are tax-free.

However, if your employer paid for the policy, and does not include the cost of the policy in your gross income, the benefits are taxable, as it would be if you were earning an income.

Taxation of Disability Benefits in Houston, TX

If you shared the cost of the premium with your employer, you will share the tax benefits as well. The part that you paid (with after tax dollars) for will be tax free, but the portion your employer paid for will be taxable.

Should you retire from your job on disability, lump-sum payments for accrued time (such as vacation) are not part of a disability package. It is taxable, and should be listed as income.

The IRS also offers additional information on their website.

Disability Benefits From Social Security—SSDI And SSI

SSDI can be subjected to income tax, depending on what other income you may have (such as a spouse’s income.) However, many recipients don’t have much in the way of income, and do not end up paying taxes.

Under Social Security, you would receive one of two types of income:

  • Social Security Disability Insurance, or SSDI, which is based on your working history and funded through payroll taxes
  • Supplemental Security Income, or SSI, a need-based program which is awarded to low-income individuals, or individuals who haven’t earned enough work credits to qualify for SSDI. SSI benefits are not taxed.

They are both separate and distinct programs administered by the Social Security Administration.

As an individual, if your annual income is less than $25,000, you would not pay any income tax. If your annual income is from $25,000 to $34,000, your SSDI benefits would be taxed at 50%. If your monthly income exceeds $2,834, and your annual income exceeds $25,000, your SSDI would be taxed at 85%.

Married couples have a similar taxation schema, with up to 32,000 untaxed, up to $44,000 at 50%, and over $44,000 at 85%.

  • “Back pay” of benefits—if you receive a lump sum of money for the previous months of benefits since your application date, you may be taxed at a higher rate because of it. However, with the help of a CPA or other tax professional, you can amend your previous tax returns to include the back pay money so that you are not taxed as heavily on your current year’s tax return.

Some states tax SSDI benefits, but Texas does not.

VA Disability Benefits

While military retirement pay may considered taxable income (if it’s based on age or length of service), military and/or VA disability benefit payment resulting from service-connected illness or injury is not.

Other veterans benefits paid to you or your family are also not taxable (from Military.com):

  • Education, training, and subsistence allowances
  • Disability compensation and pension payments for disabilities paid either to veterans or their families
  • Grants for homes designed for wheelchair living
  • Grants for motor vehicles for veterans who lose their sight or use of their limbs
  • Veterans’ insurance proceeds and dividends paid either to veterans or their beneficiaries, including the proceeds of a veteran’s endowment policy paid before death
  • Interest on insurance dividends left on deposit with the VA
  • Benefits under a dependent-care assistance program
  • The death gratuitypaid to a survivor of a member of the Armed Forces who died after Sep. 10, 2001
  • Payments made under the compensated work therapy program
  • Any bonus payment by a state or political subdivision because of service in a combat zone

The IRS publishes a guide specifically for military members to help with tax preparation, as well as one on taxable and nontaxable income. Additionally, the IRS can assist you with tax preparation if you need it.

Other Nontaxable Benefits

These types of benefits are also non-taxable:

  • Payments for blindness and other benefit payments from a public welfare fund
  • Workers’ compensation for occupational injury or illness if it’s paid under a workers’ compensation act or similar law
  • Compensatory damages for physical injury or physical sickness (punitive damages are taxable, however)
  • Disability benefits under a “no-fault” auto insurance policy for income loss or earning capacity as a result of injuries
  • Compensation for permanent disfigurement or the permanent loss or loss of use of a part or function of your body

If you have any questions about what is taxable or nontaxable, consult with your tax professional, or with a disability attorney.

Have Questions On Disability? Herren Law Can Help

The Herren Law Firm can help you with your application, appeals and help you through the process, and give you one less thing to worry about. Contact us today at 713-682-8194 (or use our online contact form) to schedule your free consultation. There’s no obligation, and no up-front fees.  We only collect if we win your case.

What Is ERISA And What’s The Connection To Houston Disability Benefits

If your employer covers your benefits package, it’s likely governed by ERISA. Most employer-sponsored plans are ERISA-regulated, except for privately-purchased policies or those provided by governmental agencies, churches or church-owned hospitals.

What Is ERISA And What's The Connection To Disability Benefits In Houston, TX

Despite the title and description, getting disability benefits isn’t always as simple as filling out forms and waiting for a check. Although ERISA was created to protect employees’ benefits and rights, its complex requirements can sink your claim right after you file it. If you file a claim and don’t follow the ERISA guidelines exactly, you claim may be denied without the right to appeal. Missing a deadline for appeal can prohibit you from filing a future claim.

ERISA Basics

Employer-sponsored benefits plans are regulated by ERISA, or Employee Retirement Income Security Act, established in 1974.This federal law under the US Department of Labor that “sets the minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in the plans.”  If you apply for disability and are denied, ERISA gives you the right to sue the insurer in federal court.

ERISA requires that employers provide their employees with basic information that includes:

  • Details of what’s covered and not covered under the plan
  • Instructions on filing a claim if an employee becomes disabled
  • Details of the company’s appeal process if the company denies an employee’s claim

ERISA sets a limit on the insurer’s timeframe to accept or deny a claim once it’s filed. The insurer has 45 days to render a decision, but can add an additional 30 days, and must notify the employee in writing.

If the insurer denies the claim, it must provide the reasons in writing within 45 days. ERISA controls not only the employee’s time frame for appeal, it also controls the deadlines for insurers to approve or deny the appeal.

Providing Documentation

It’s important to have a wealth of documentation in your claim file at the outset. This includes medical records, test results, doctor’s notes, and other instruments that will prove your claim for disability. Your attorney can advise you on the ERISA requirements, what information you need, and what you’ll need to request.

Note that if your claim is denied on appeal and you decide to move forward with a lawsuit, you will not be able to add additional evidence or information as you would with a civil or criminal trial or appeal. Everything that is already in your file is all that the judge will see. That’s why it’s important to have as much documentation to support your claim as you can obtain as soon as you can.

Discretionary Clauses In Texas Are Denied

You may have heard the term “discretionary clause” when discussing your policy with your employer or with the insurer. This is language written into the policy and allows the insurer plenty of “wiggle room” to limit or deny their claims. The clauses also prevent a court decision from reversing the insurer’s claim decisions.

In 2012, the state of Texas passed a law prohibiting any insurance company from using “discretionary clauses.” That is, any policy written or renewed after January 1, 2012 in Texas cannot contain a discretionary clause.

Deadlines Count

Insurers have specific deadlines for filing claims for disability benefits as well as appeals. Don’t miss a deadline, and make sure your claim adheres to ERISA’s very complicated rules. Let an experienced Houston disability benefits attorney take care of your claim and make sure everything is taken care of.

The Herren Law Firm can help you with your ERISA application, appeals and help you get the long-term disability benefits you need. Contact us in Houston today at 713-682-8194 to schedule your free consultation. There’s no obligation, and no up-front fees.  We only collect if we win your case.