9/11 victim fund will cut payouts by up to 70 percent as claims surge

The September 11th Victim Compensation Fund plans to cut future payouts in half — and in some cases by as much as 70 percent — as it struggles with a surge of new claims from those who have gotten sick and the families of those who have died, officials announced Friday.

The fund was opened by the federal government in 2011 to compensate for deaths and illnesses linked to toxic exposure at the World Trade Center, the Pentagon, and in Shanksville, Pennsylvania, after terrorists crashed four hijacked airliners in 2001. To date, the $7.3 billion fund has paid about $5 billion to roughly 21,000 claimants. About 700 were for deaths that occurred long after the attacks.

Now, faced with more than 19,000 additional unpaid claims, the math has become painful.

“We recognize that this is horribly unfair, particularly because we have spent the balance of this program paying claims at full value, and claimants who are coming in now are going to receive less,” said Rupa Bhattacharyya, who administers the fund. “Unfortunately, the law really leaves us no choice. This is the fairest way we could come up with to do it.”

Bhattacharyya warned in October that the fund’s balance was falling while claims were skyrocketing, and that claims received after Feb. 1 may not receive the full amounts given to earlier claimants. That prompted another rush of thousands of claims, yet even that approach was overly optimistic.

Officials announced Friday that any pending claims, including those received before Feb. 1, will be paid at 50 percent of their prior value. Valid claims received after that date will be paid at just 30 percent. The fund is scheduled to stop taking claims in December 2020.

Sen. Kirsten Gillibrand, D-N.Y., who played a key role in getting Congress to pass legislation re-creating the fund, said she would push for passage of a new law to add more money and make the fund permanent.