Valuing Your Victim Compensation Fund Award
One of the most pressing issues on VCF claimants’ minds — and one of the most common questions we receive — is how much compensation they may recover. As with most questions in the legal world, the answer is “it depends.” Generally, the amount of compensation a claimant receives depends upon the extent of their losses.
Calculation of VCF Awards
The VCF calculates each claimant’s award based upon the following formula:
Non-economic losses + economic losses – collateral offsets = award amount
Non-economic losses are what are known in the legal world as “pain and suffering,” which the VCF defines as physical and emotional pain, suffering, inconvenience, physical impairment, mental anguish, disfigurement, loss of enjoyment of life, loss of companionship, loss of consortium, hedonic damages, and injury to reputation. It is difficult to attach a precise dollar amount to these types of damages, but their calculation is based upon their severity. In all cases, non-economic losses are capped at $250,000 for those that result from cancer and $90,000 for those that do not result from cancer.
Economic losses are losses that the claimant incurred as a result of a physical injury. They cover earnings the claimant lost before he or she filed a VCF claim as well as those he or she expects to lose in the future as a result of an eligible condition. The amount of economic losses varies according to the claimant’s age, income, percentage of disability, the date of onset of the disability, and the existence of employer-provided benefits. However, the program caps the claimant’s maximum gross income per year to $200,000.
Special Issues When Calculating VCF Awards
There are several additional issues that can affect an individual claimant’s VCF award, including collateral offsets, attorney’s fees, and bankruptcy. For more information about issues that can affect your VCF award, please contact a 9/11 attorney.
After the claimant’s economic and non-economic losses are determined, payments the claimant receives from other sources — known as “collateral sources” — are subtracted. Collateral sources include:
- Life insurance proceeds
- Disability or death benefits (including those from pensions)
- Disability insurance payments
- Death benefits
- Payments from governmental sources (including social security disability, workers’ compensation, and VA disability benefits)
- Settlement payments from 9/11-related lawsuits
Collateral sources do NOT include:
- Services or in-kind charitable gifts
- Donations from privately funded charities
- Federal tax benefits received through the Victims of Terrorism Tax Relief Act
VCF recipients are required to notify the VCF of all new collateral source payments they receive, as well as increases or decreases in previously-reported collateral source payments.
The VCF does not reimburse recipients for attorney’s fees, which are to be paid by the claimant. However, the VCF limits the amount a 9/11 attorney may charge a claimant to 10% of the claimant’s VCF award.
Bankruptcy courts treat VCF benefits differently according to the facts of the individual case. However, if the bankruptcy court orders that the claimant’s VCF benefits be paid to a trustee in bankruptcy, the claimant must notify the VCF and provide the court order.
The IRS does not consider VCF benefits to be taxable income; therefore, claimants do not need to report VCF benefits as income for federal tax purposes.
Workers’ Compensation Liens
Some state workers’ compensation programs contain provisions that allow insurance carriers to assert liens on the insured’s VCF benefits. While the state of New York prohibits this practice, claimants in some other states may be required to notify the VCF if benefits they received are subject to a lien.