Awards in Personal Injury Suits Don’t Affect Eligibility for Aid, Court Says
Awards won in personal injury lawsuits cannot be counted as income in determining eligibility for Aid to Families with Dependent Children, a federal appeals court ruled Friday.
Like an insurance payment for a house fire, “personal injury awards serve to make one whole, in effect restoring one to the status quo before the injury was suffered,” the U.S. 4th Circuit Court of Appeals said. “Income, on the other hand, represents a gain or profit.”
“There is litigation all across the country on this point,” said Jill Hanken, the Virginia Poverty Law Center lawyer who challenged the Virginia regulation. In Virginia, damages from a personal injury suit were considered a lump sum payment, although other sorts of cash awards were not. The appeals court said it makes no sense to single out personal injury awards.
The appeals court, which upheld a lower court decision, is the highest court to decide the issue based on federal rather than state law.
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