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Victims' families to get average of $1.5 million

Special master Kenneth Feinberg  

By Terry Frieden
CNN Washington Bureau

WASHINGTON (CNN) -- Families of victims of the September 11 attacks will receive, on average, about $1.5 million from government and other sources -- excluding charities -- under regulations announced Thursday by the Justice Department.

The range will be from $300,000 to families of single people earning as little as $10,000 per year to as much as $3 million for top-earners with large families.

Kenneth Feinberg, the special master appointed by the attorney general, reported the "interim final rule" Thursday afternoon at the Justice Department.

"It is our view that, absent extraordinary circumstances, awards in excess of $3 million, tax-free, will rarely be appropriate in light of individual needs and resources," Feinberg's 76-page report said.

"At the same time, we want to ensure that victims' families are receiving at least a minimum level of resources to help meet their needs and rebuild their lives.

"Thus, we have concluded that the families of deceased [married] victims should receive a combined total of at least $500,000 from this program, other state and federal programs, life insurance policies and other sources of compensation," the report said.

Feinberg said the plan provides an alternative compensation scheme to the conventional civil court system: a method of providing substantial and quick compensation for those who elect to participate.

Those who choose not to participate would retain the right to file civil suits. Feinberg called that step unwise.

"If you decide to litigate, the likelihood of receiving a substantial award in court is diminished," he said. The extent of liability of the airlines is uncertain and, "even if you receive an award, it will be subject to an appeal."

The U.S. unveiled how it will figure out how much money families of World Trade Center victims are eligible to receive. CNNfn's Peter Viles reports (December 21)

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Under government regulations, all eligible recipients can receive an immediate advance payment of $50,000 in cases involving death and $25,000 in cases involving serious physical injury.

Offices in New York and Virginia will be open at 1 p.m. Friday to begin processing applications. They will be processed within 120 days.

The payout will be calculated based on the combination of economic loss -- what the person would have earned -- and non-economic loss -- pain and suffering, emotional distress and loss of consortium.

From that total, life insurance or other death benefits will be subtracted. Charity payments, though, will not be subtracted, Feinberg said. He predicted the average award, before death benefits are subtracted, would be $1,650,000, tax-free.

Under the formula, a 41-year-old claimant with two children earning about $80,000 per year would get $1,583,000.

In an effort to even the disparity in payments, Feinberg capped -- for the purposes of his computations -- the salaries of the top 2 percent of earners at about $240,000 per year.

Claimants who feel their award is unfair can ask for a new review or can submit documentation on their behalf, he said.

The Congressional Budget Office estimates the program will cost around $6 billion -- before the deductions are factored in. Feinberg called it "an unprecedented display of taxpayer generosity."

Still, the program "cannot possibly provide a full measure of relief to those who have suffered as a result of September 11," he said. "Whatever we do is of small comfort."

Everyone wounded or killed in the attacks is eligible, regardless of nationality or immigration status.

Eligibility is not entirely spelled out in the new regulations. Whether same-sex domestic partners would be eligible is up to the discretion of the special master.

A spokesman for the Human Rights Campaign, an organization representing the interests of gays and lesbians, said he "remains concerned."

"Domestic partners named in wills are clearly taken care of, and those who live in New York we believe are eligible," said David Smith. "However, partners not named in wills and not in New York, it is uncertain and is within the special master's discretion."

Meanwhile, the Senate and the House Thursday passed the Victims of Terrorism Tax Relief Act of 2001, which extends tax relief to families of persons killed as a result of the September 11 attacks.

Victims of the 1995 bombing of the Alfred P. Murrah federal building in Oklahoma City and the victims of the recent anthrax attacks are also eligible for this relief.

In addition to refunding income taxes for 2000 and 2001, the measure provides a minimum $10,000 rebate to the victims who did not make enough money to pay income tax.

The bill also shields a certain amount of assets from the federal estate tax and protects families from taxation on death benefits, charitable contributions and debt forgiveness.

"Passing this legislation today is an important step in making sure that these families, who have been through so much, receive the financial relief that they need," said Sen. Hillary Clinton, D-New York.


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