VA benefits are currently paid based on the date of claim. Although there are different laws governing entitlement dates, most of the time benefits are paid based on the date that a claim was received, at least for original claims. For instance, if a claim is received June 15, 2011, the payment date will be July 1, 2011. Therefore, when the claim is finnally decided and a payment is going to be made, July 1, 2011 would be the date from which retroactive entitlement is calculated. Making payment in this fashion was established by the Omnibus spending bill, thereby eliminating the partial month of entitlement.
The Social Security Administration currently makes beneficiaries wait for payment for 5 months after a disability arises. I suggest that the VA does something similar to cut down on costs by extending the omnibus rule an additional month. So when an application is received on June 15, 2011, the payment date for cacuclating retroactive benefits would be August 1, 2011 under this idea, instead of July 1, 2011. This idea could be extended to all laws governing entitlement dates, as the date of payment for additional benefits is usually the first of the month following the date of claim. Extending the waiting period an additional month would save the government millions if not billions of dollars over time.