The VA cut its disability claims backlog by two-thirds in a year — as PACT Act costs more than doubled
Summary
The VA's disability claims backlog fell from 264,000 in January 2025 to 83,000 by early 2026, and average processing time nearly halved, from 141.5 days to 78.6 days. The cost of getting there is rising fast: the PACT Act's Toxic Exposures Fund is projected to hit $52.6 billion in 2026, more than double its 2024 cost — and a federal watchdog found that most PACT Act-related denials it reviewed in one period may have been wrong.
Follow the toxic exposures cost
The PACT Act expanded disability eligibility to millions of veterans exposed to burn pits and other toxic substances, and created a dedicated fund to pay for it. That fund's cost has been climbing steeply as more of those claims work through the system and get approved.
View data as table
| 2024 | $20.0B | Toxic Exposures Fund cost |
|---|---|---|
| 2025 | $30.4B | Toxic Exposures Fund cost |
| 2026 (projected) | $52.6B | Toxic Exposures Fund cost |
The Toxic Exposures Fund cost $20 billion in 2024, $30.4 billion in 2025, and is projected to reach $52.6 billion in 2026 — more than 2.6 times its 2024 level in two years. That growth sits inside a total disability compensation budget of $220.3 billion for FY2026, covering more than 7 million veterans and survivors, out of an overall budget request of $441.3 billion, up 10% from FY2025.
The same system, counted in pending claims
Behind every dollar in that fund is a claim that had to be filed, reviewed, and decided. For most of 2025 and into 2026, the processed those claims faster than it has in years.
View data as table
| Jan. 2025 | 264,000 | pending disability claims |
|---|---|---|
| Early 2026 | 83,000 | pending disability claims |
The backlog of pending disability claims fell from 264,000 in January 2025 to 83,000 by early 2026 — a drop of about two-thirds, and the lowest level since 2020. Average processing time nearly halved over the same period, from 141.5 days to 78.6 days, even as the processed more than 3 million claims in FY2025 alone, the most in the department's history, and had already processed over 2 million more by early June of FY2026. Reported claims accuracy climbed above 94%, the highest rate in two years.
That speed has a documented cost, though, beyond the dollars. A Office of Inspector General report issued September 30, 2025 found that roughly 61% of PACT Act toxic-exposure claim denials it reviewed from a sample period in 2023 may have been incorrect — a warning that processing more claims faster doesn't automatically mean processing them right, even as the department's own accuracy metrics have improved since.
The takeaway
- Two numbers moved in genuinely good directions at once. A backlog down two-thirds and processing times cut nearly in half are real operational improvements, not just favorable framing.
- The bill for that speed is not shrinking — it's compounding. The Toxic Exposures Fund's cost is on pace to more than double from 2024 to 2026, and it's layered on top of a budget already growing 10% year over year.
- Faster isn't the same as more accurate, and the record on that is mixed. A federal watchdog's finding that most reviewed PACT Act denials in one period may have been wrong is a reason to watch accuracy trends closely, even as headline speed and volume both improve.
Backlog, processing-time, and fund-cost figures reflect the most recently reported data as of mid-2026 and are subject to revision; the publishes updated claims statistics regularly. The accuracy finding applies to a specific 2023 sample period, not the department's current denial rate.
Sources
- Stars and Stripes — the disability claims backlog dropping to 83,000 by early 2026, the lowest since 2020. stripes.com
- VeteranLife — the January 2025 backlog baseline (264,000) and average processing-time figures (141.5 days to 78.6 days). veteranlife.com
- News — the more than 2 million disability claims processed in FY2026 as of June 1, 2026, and claims-accuracy figures above 94%. news.va.gov
- Military.com — FY2025's more than 3 million claims processed, the most in history, and the 62% approval rate reported for the year. military.com
- U.S. Department of Veterans Affairs, FY2026 Budget Submission — Toxic Exposures Fund costs by year, total disability compensation ($220.3B), and the overall budget request ($441.3B). department.va.gov
- The American Legion — FY2025 budget context, including disability compensation and medical care spending. legion.org
- Military.com — Office of Inspector General finding on PACT Act toxic-exposure denial accuracy for a 2023 sample period. military.com
Comments
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Two things can be true about a benefits system at the same time: it can be clearing its backlog faster than it has in years, and it can be spending far more to do it. The 's disability claims system, still absorbing the volume the 2022 PACT Act added, is doing both at once.