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The September 11 Victim Compensation Fund of 2001

Report No. 04-01
October 2003
Office of the Inspector General

Appendix III
Explanation of the Claim Process


PwC staff receives the claim and reviews the claimant's eligibility based on the Act and the regulations. PwC provides the Special Master with an eligibility recommendation, and the Special Master then makes a final determination. To be eligible to file a death claim, the victim must have died while present at one of the sites or from injuries sustained at one of the sites on September 11. To be eligible to file a physical injury claim, the victim must have been present at one of the sites on September 11 and have suffered a physical injury that required in-patient hospitalization for at least 24 hours or "caused, either temporarily or permanently, partial or total, physical disability, incapacity, or disfigurement." The claimant must also have sought medical attention within 24 hours of sustaining the injury; however, this time requirement was expanded to 72 hours for rescue personnel.15 VCF procedures require that each death claim must contain: (1) a death certificate, (2) at least one other document that confirms the victim's presence at one of the designated locations on September 11, (3) an original court document appointing a personal representative for the deceased, and (4) proof that all interested parties have been notified that the claim is being submitted. Physically injured victims must substantiate their presence at one of the designated locations on September 11 and provide medical records establishing the nature of their injuries and the date(s) of treatment. Two PwC officials review all recommendations of eligibility before submitting their recommendation to the Special Master. The Special Master reviews the eligibility recommendations and makes a final decision on the claimant's status.

Advance Benefits

Under the regulations, some claimants have the option of receiving Advance Benefits. Advance Benefits are designed to assist claimants who are financially troubled. Death claimants are entitled to Advance Benefits if they have not received more than $450,000 in collateral source compensation. Physical injury claimants must have undergone at least one week of hospitalization to be eligible to receive Advance Benefits. All Advance Benefits that are awarded are credited against the claimant's final award.

Award Process

After VCF officials determine a claimant is eligible, they review the claim to assure that all necessary information has been included in the file. When all relevant documentation is received, VCF personnel classify the claim as "substantially complete" and it is formally considered "filed." At this point, the claimant waives his or her right to file a civil action for damages sustained as a result of these terrorist related aircraft crashes of September 11. PwC personnel then use a computer model to calculate a presumptive award. The Special Master has 45 days to present the claimant with a presumed award amount and 120 days to present the claimant with a final award amount.

The presumptive award amount is computed using a calculation model and data taken from the claim file. The Act requires that the award calculation be based on economic loss plus noneconomic loss less collateral sources of compensation (see detailed discussion below). Thus, claim form data includes the victim's income, age, family structure, and dependent information in addition to the proceeds from collateral sources. VCF procedures require claimants to provide documentation of the victim's income for calendar years 1998 through 2001. This documentation can be in various forms, including tax returns, employer-provided information, and Social Security Administration records. The claim form requires that claimants accurately divulge this information under penalty of law. While the methodology used to calculate the awards is not explained in the regulations, the VCF's website does explain the calculations for potential claimants.

We obtained the models used to calculate the presumptive awards from PwC.16 These calculation models are used only for death claims; physical injury claims are handled on a case-by-case basis. PwC has six calculation models for different categories of death claimants: (1) military personnel, (2) employees of the New York City Fire Department and the New York City Police Department, (3) federal employees under the Federal Employees Retirement System (FERS), (4) federal employees under Civil Service Retirement System (CSRS), (5) federal employees who switched from CSRS to FERS, and (6) all others.

Economic Loss

PwC personnel calculate the economic portion of the presumptive award by determining the victim's income, subtracting federal, state, and local taxes, and then adding in the victim's employer-provided benefits, such as bonuses and 401K matches. This figure is increased based on the victim's work?life expectancy and an applicable wage?growth rate is then applied. A percentage representing the victim's share of household expenditures and consumption is subtracted, and the whole amount is reduced to present value.

Noneconomic Loss

The VCF set the noneconomic portion of the award (pain?and?suffering) at $250,000. For a death claim, the VCF automatically awards $250,000 for the decedent with an additional $100,000 for the spouse and $100,000 for each dependent of the decedent. For physical injury claims, the Special Master can increase or decrease the $250,000 presumptive amount based on the individual's circumstances. For example, he awarded $7,500 to a claimant who suffered corneal abrasions, and $15,000 to a claimant who suffered an ankle fracture and a temporary disability. On the other hand, he awarded $250,000 to a victim with burns, fractures, and a permanent disability, and $5 million to a totally disabled claimant who suffered severe burns.

Collateral Sources

Once PwC personnel calculate the economic and noneconomic damages, they deduct qualified collateral sources from this total. Qualified collateral sources are the benefits the family of the victim received as a result of the victim's death or physical injury. As a general rule, payments from charities and contingent payments are not considered qualified collateral sources. An example of a contingent payment is future Social Security Survivor Benefits paid to a spouse. Because such payments end if the spouse remarries, Fund personnel cannot accurately calculate the value of such payments over the spouse's lifetime. Ideally, the claimant provides on the claim form all of the information needed to complete the identification and valuation of collateral sources. However, PwC staff often have to augment the claim through other sources, including the Social Security Administration, the victim's employer, and the third-party payors of the benefits. Examples of collateral source benefits that the VCF must deduct to calculate a final award include the following:

  • life insurance
  • survivor pensions
  • Social Security Death Benefits
  • past Social Security Survivor Benefits paid to spouses
  • past and future Social Security Survivor Benefits paid to children and dependent adults
  • past and future non-contingent Workers Compensation benefits.

No maximum payout is established by the Act or the regulations; however, the regulations do establish minimum awards before collateral sources are deducted. For a single deceased person, the minimum is $300,000, and for a married deceased person or a deceased person with a dependent the minimum is $500,000. In addition, the Special Master noted that it would be very rare for a death claimant to receive less than $250,000. During our interview with the Special Master, he explained that he established this policy because he wants as many victims as possible to file claims with the Fund. If potential claimants find that they are not entitled to any compensation, they would have no incentive to participate in the Fund.


When submitting their claims to the VCF, claimants select either the Track A or Track B claim?processing option. Regardless of whether a claimant selects Track A or Track B, the Special Master will conduct a hearing for any claimant that desires one. In some cases the Special Master communicated with them before their claims were even submitted to the VCF. Because these claimants were given an opportunity early in the process to discuss their claims with the Special Master, a formal hearing was not needed.

Number of Claims Filed and Processed

As of the beginning of our fieldwork on November 13, 2002, the Special Master had determined presumed awards for 92 of the 792 claims submitted.

Total Claims Submitted 792
  Total Claims With Presumed Awards 92
  Total Claims Denied/Withdrawn 73
  Total Claims Possibly Fraudulent 17
  Total Claims Awaiting Presumptive Award 610
Source: PwC

Of the 92 claims that had been issued presumed award letters, 7 had been paid, 60 had been accepted by the claimants but not yet paid, 8 claimants requested hearings with the Special Master, and 17 claimants had not responded.

Of the 610 claims that were waiting for a presumptive award, claimants had not submitted the information required for PwC to perform the calculations for 585 (95.9 percent) of the claims. VCF personnel could not identify any one stumbling block to the claimants' completion of these claims, but they provided the following examples of problems that have been encountered:

  • many claimants did not understand that they had to go to court to be appointed as the personal representative in order to provide the VCF with their letters of administration;
  • some claimants found it difficult to obtain and submit original documentation of compensation amounts, confirmation of collateral sources, and proof of the victim's presence at the applicable site;
  • claim form processing was delayed because claim forms were completed incorrectly, many because claimants signed or initialed the forms in the wrong places;
  • claimants refused to sign the lawsuit waiver until they were provided with award amounts; and
  • processing delayed by claimants who, with the advice and assistance of outside professionals, added extraneous information to their claim submissions, such as home movies and greeting cards, which do not affect the calculation models, but do add to claim intake and review time.

VCF personnel also indicated that the employer-provided information has improved over time and that some employers have even created resources to assist claimants in filling out claim forms and to explain the employer-provided benefits to the claimant.

The following charts contain unaudited statistics provided by Civil Division regarding the types of claims submitted to the Fund and the number of award letters issued as of August 14, 2003. Of the estimated 3,000 potential death claims, claimants had submitted 1,177 claims to the VCF. For these 1,177 claims, the Special Master issued presumed awards to 532 claimants. In addition, although the Special Master now estimates that up to 3,000 physical injury claims would be eligible for compensation from the Fund, 1,028 physical injury claims had been submitted. The Special Master denied 180 of these 1,028 claims because of the claimant's ineligibility and issued presumed awards for 188 of the remaining claims.

Type of
Number of
of Claims
Percent of
Death 3,000 1,177 39
Physical Injury 3,000 1,028 34
Total 6,000 2,205 37
Source: Civil Division


Type of
Number of
Percent of
Percent of
Death 451 38 15
Physical Injury 155 15 5
Total 606 27 10
Source: Civil Division

Efforts to Increase Participation

To publicize the existence of the VCF to potential claimants, Fund personnel began a series of projects in early 2002. These included holding town hall meetings in affected cities, running newspaper ads, distributing mass mailings, and setting up Claim Assistance Sites (CAS). VCF personnel noted that the VCF procedures were designed so that claimants do not need a lawyer and could bring the documents into the CAS to have VCF personnel assist them in filling out the claim form. In August 2002, the VCF had nine CASs in operation. Because of decreased demand for assistance, one of those sites has been closed. All but two of the remaining eight are running on appointment-only schedules. In addition to the above activities, VCF personnel communicated with September 11 charities and courts that have contact with victims and their families to obtain their cooperation in notifying potential claimants of the existence of the Fund. According to the Civil Division's response to the draft report, the Special Master anticipates running additional advertising beginning in September 2003 in addition to other outreach activities such as town hall meetings to alert potential claimants that the filing deadline is approaching.


  1. September 11 Victim Compensation Fund of 2001, 28 CFR Part 104.2 (March 13, 2002) at 11233.
  2. In their response to the draft report, the DOJ Civil Division informed us that a seventh model had been developed since our on-site review. This model is designed to calculate presumptive awards for Employee Retirement System (ERS) Port Authority civilians.
  3. We are including as an "award letter" those awards accepted under track A and finalized through hearings under tracks A and B.