Department of Veterans Affairs Claims Backlog Reduction Act of 2005

Department of Veterans Affairs Claims Backlog Reduction Act of 2005 - Directs the Secretary of Veterans Affairs to: (1) identify the current backlog of veterans' claims for benefits through the Department of Veterans Affairs and to categorize those claims; and (2) identify claims that need further development and refer them to a geographically appropriate County Veterans Service Office. Allows veterans' claims to be submitted to County Veterans Service Officers (in lieu of the Department) and authorizes the Officers to fully develop such claims. Requires appropriate information sharing between the Department's Benefits Delivery Network and the Offices.

Requires funding provided by this Act to be allocated to States based on their respective populations of veterans and allocates such funds to the appropriate Office. Prohibits Federal funding from exceeding 50 percent of the costs of Office operations. Allows funding to be used to establish Officer programs in States that do not have one.