Important Financial Facts about VCF Payments
Serious injuries often come along with significant financial difficulties brought on by medical bills and the reduction or total loss of income resulting from disability. Victims of WTC-related injuries are no exception. Many individuals waiting for Victim Compensation Fund (VCF) payments are simultaneously struggling with other financial and legal issues. Therefore, it is important to understand the legal status of VCF funds and how receiving them can affect other aspects of your life.
VCF awards may be offset by other types of payments such as pensions and Social Security disability. In other matters, however, VCF payments receive more favorable treatment than other types of cash awards:
- VCF payments are not subject to federal income tax.
- VCF payments are not subject to Medicare secondary payor liens.
- VCF payments may have an effect on bankruptcy proceedings. Therefore, anyone who expects to receive VCF payments and has filed or is considering filing bankruptcy should consult a bankruptcy attorney.
- VCF payments may be considered income in some states for the purpose of calculating child support payments or other domestic obligations.
- Under New York law, VCF payments are not considered martial property for the purpose of equitable distribution.
VCF payments are meant to compensate victims and their families for a lifetime of pain, suffering and reduced earning capacity. They should not be viewed as a windfall. Comprehensive planning is necessary to preserve the long-term well-being of you and your loved ones. A knowledgeable WTC compensation attorney can help address any concerns you may have about the consequences of VCF payments and, if necessary, can help you get in touch with lawyers and other professionals to assist with your specific issues.