The simple answer is NO. However, keep in mind, we are not tax accountants or tax attorneys and do not provide financial or tax advice. Each claimant should seek a professional opinion regarding this question. In some States, where a claimant is currently receiving State financial/housing assistance, a potential claimant should seek professional advice before concluding a claim.
The full text of the EEOICPA law is provided below. A specific clause states:
“Compensation or benefits provided to an individual under this (EEOICPA) …
(1) shall be treated for purposes of the internal revenue laws of the United States as damages for human suffering; and (2) shall not be included as income or resources for purposes of determining eligibility to receive benefits described in section 3803(c)(2)(C) of Title 31, or the amount of such benefits.
Pub. L. 106-398, Title XXXVI, § 3646; Pub. L. 108-375, § 3162(e)
http://www.dol.gov/owcp/energy/regs/compliance/law/EEOICPAALL.htm
Section 3803(c)(2)(C) of Title 31