A small group of disabled military retirees this month will be the first of 133,000 to receive lump-sum back payments, which are tied to start-up challenges for two "concurrent receipt" programs enacted since 2003, say officials with the Defense Finance and Accounting Service.

The trickle of back payments in September will become a small geyser at the end of October. By then, officials say, another 40,000 retirees will see their catch-up payments deposited electronically in their bank accounts by either the Department of Veterans Affairs, DFAS or by both.

Back payments will vary from several hundred dollars up to $10,000 or more.

Almost all retirees in line for the back pay served 20 or more years, and all have disabilities that made them eligible for Concurrent Retirement and Disability Pay or Combat-Related Special Compensation.

Pat Shine, DFAS' deputy director for operations, said from Indianapolis that most back payments will be made within the next six months, with DFAS focusing first on older cases. He said it could take up to six more months to calculate and pay the most complex retro pay file. These involve multiple VA rating adjustments since CRSC and CRDP began, shifts by retirees between these two types of payments, ex-spouse pay entitlements and other issues that requires long record searches.

DFAS officials are calling the $500 million back-pay effort the VA Retro Pay Project. Retirees don't need to apply. A VA Retro Award hot line has been set up to field questions from CRSC and CRDP recipients who believe they might qualify. That toll free number is (877) 327-4457.

By late this week, DFAS officials hope to post a detailed explanation of the back-pay program on its Web site, www.dod.mil/dfas.

Thomas J. Pamperin, assistant director for policy with VA's Compensation and Pension Service in Washington, D.C., said he and his staff have been working with DFAS for almost 18 months. The back-pay issue, he said, is "something where neither one of us can do it by ourselves. We need a lot of information exchanged."

DFAS and VA now are "testing files that have been transferred back and forth between us," he said. "We are going to have a final test the last week in September to make sure that all the (software) logic is working" to identify eligible retirees and calculate retro payments.

VA figures to pay 80 percent of money owed. Some retirees will receive two checks, one from the VA and another from DFAS. Before payments are deposited, affected retirees will get letters explaining reasons for the back pay and how the amounts were calculated, Pamperin said.

"What we are talking about here is a situation where people's entitlement to disability pay had a (start) date prior to the date we actually started paying it," Shine said.