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What is Victim Compensation?

— February 25, 2021

While there are some issues victims are facing when obtaining VCF, lawyers are available to help them understand their rights.

The worst thing that could happen to anyone is getting injured or killed because of someone else’s negligence or intentional harm. As much as you’re too safety- and health-conscious, you can’t control the people and the things happening around you. You might be surprised being attacked or being involved in an accident. After which, you’ll find yourself filing a claim to receive victim compensation, or filing a lawsuit against the person who caused you harm. 

If you or a loved one is a victim of negligence or crime, you can file a claim to obtain victim compensation, which will be discussed in detail below. 

What is Victim Compensation? 

Victim compensation pertains to money paid by a party or the government, unrelated to the offender, to crime victims. The amount of funds reflects the extent of injuries suffered by the victims. One good example of victim compensation is 9/11. 

This law firm published an article which mentioned that thousands of victims who suffered severe losses from the September 11, 2001, or 9/11, terrorist attacks have filed claims to receive awards from the Victim’s Compensation Fund (VCF). 

What is the September 11th Victim Compensation Fund?

Image of the September 11th attacks. Image via Flickr/user:nostri-imago (CCA-BY-2.0)

One of the most unforgettable events in history was the 9/11 or September 11 attacks in 2001. In fact, it’s the deadliest terrorist attack, wherein 343 firefighters and 72 law enforcement officers were killed. Four teams of Al Qaeda terrorists hijacked four planes, two of which crashed into the World Trade Center’s north and south towers in Lower Manhattan. 

Because of the tragedy, about 2,996 people died, including all hijackers, and more than 6,000 people were injured. The 9/11 prompted the creation of the September 11th Victim Compensation Fund. The Act of Congress created the September 11th Victim Compensation Fund under the Air Transportation Safety and System Stabilization Act after 9/11. It aims to compensate the 9/11 victims and to sue the airlines involved. 

Benefits of Victim Compensation Funds 

The primary purpose of a victim compensation fund is to provide just compensation to the victim when the offender fails to repair the harm caused. Because many offenders are hardly caught, prosecuted, and convicted, government compensation funds are the only way to repair the crimes’ harm to victims. 

Here are the benefits of a victim compensation fund: 

  • Alleviates the financial hardship caused by a crime 
  • Facilitates the victim’s healing process 
  • Meets the criminal event’s societal acknowledgment sought by victims 
  • Absolution from the responsibility of the negligent party 

Issues Arising from Victim Compensation Funds 

While VCF helps victims seek some form of justice for the crimes they’ve suffered from, some issues may arise from it, including: 

  • Social Justice 

Because victims are asked to relinquish their rights to file a lawsuit against the negligent parties, the government is responsible for protecting and compensating the former. The government compensates victims for retribution, especially when offenders were granted many rights, protections, and services. 

However, issues may arise from VCF, like tolerating criminals, knowing the government will compensate their victims for their wrongdoing. People have different views as to how VCF affects peace and order. 

  • Taxable or Non-Taxable? 

Is VCF taxable or non-taxable? The Internal Revenue Service (IRS) doesn’t include VCF payments as gross income. With this being said, you don’t have to declare your VCF on your tax return. 

  • Creditors’ Rights and Bankruptcy 

It’s important to consult with an attorney to find out whether your creditors have the right to touch your VCF payments before you file for bankruptcy. Generally, the way VCF payments are handled in bankruptcy depends on the persons’ case. 

  • Veterans’ Benefits 

There’s a possibility that your VCF award may be reduced by your veterans’ benefits, depending on the amount you receive. The Veterans Administration handles the issuance of veteran benefits associated with the 9/11 attacks. 

  • Attorney Fees and Payment Options 

Your lawyer should only charge you 10% of your total VCF award for the 9/11-related litigation. If you reside in the United States, you’ll be issued payments to your savings or checking account via electronic deposit. Those who live outside the country will receive a check. 


While there are some issues victims are facing when obtaining VCF, lawyers are available to help them understand their rights. This way, victims are provided some sort of justice, giving them financial aid and peace of mind. 

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