How do collateral offset deductions impact various beneficiaries, and is there any flexibility in how the deductions are taken?
Collateral benefits are deducted from the beneficiary who received the benefit. For example, if the beneficiaries of a death claim are a surviving spouse and two dependents and the spouse was the named beneficiary of a $100,000 life insurance policy, the $100,000 deduction will be taken from the surviving spouse’s share of the compensation fund award. However, the regulations governing the compensation fund give the Special Master the discretion to consider a claimant’s overall financial circumstances in determining how to deduct the collateral benefits. The Special Master could alter how the deduction is made (for example, by spreading the deduction between several beneficiaries or by altering the amount of the collateral benefit deducted.) If the method or amount of collateral benefit deduction will create a financial hardship, present the Special Master with factual support for the hardship and request an alternative deduction.
