Compensation payout - On benefit due to injury so Solicitor advises Ring Fencing
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Anyone receiving compensation for a personal injury should consider putting it into trust.
Receiving even a few thousand pounds in compensation can affect your entitlement to means-tested benefits and might mean you have to pay for any community care you receive. Even if you're not receiving any benefits or services now, remember this could change - you might be made redundant or need to move into residential care in the future. It's also important to think about what a child might need when they become an adult.
PI Trusts are also worth serious consideration where the person receiveing compensation has reduced capacity (e.g. an acquired brain injury) as they can be a very useful tool to provide someone with support where they would be unable to manage funds or would otherwise be vulnerable to financial exploitation.0 -
Hi there,
I can't believe what I'm reading!! Here's my situation...I was in a car accident three years ago which was serious enough for me to be awarded compensation. Since then, I have been made redundant from my job as a teacher due to cutbacks and as such am receiving benefits. I am due to receive a compensation pay-out soon and am in the same predicament. My benefits may well be cut or cancelled all together due to the fact I am unemployed and will receive compensation...
I think the people reading this quandary are missing the point that compensation is paid to someone to pay for their future care should they need it and also ease their mental anguish...it is not paid to support someone who is not working due to lack of jobs!!! I am going to do everything in my power to ensure my compensation is saved for my future care and not used for the government to shirk their responsibility to me as a tax payer! I have paid my taxes and worked unbelievably hard...the fact that my job has been cut should have nothing to do with whether or not I receive this money.
It frustrates me that people who work can receive their compensation yet people like me, who are going through the stress and unhappiness of unemployment, are penalised. Once again, I will remind you that compensation money is paid to support my future care which will, fingers crossed, not cost the NHS a penny.
Disgraceful isn't the word for some of these opinions...walk in my shoes then you might understand. This is a forum for people to help one another, not judge a moral question!!0 -
Hi there,
I can't believe what I'm reading!! Here's my situation...I was in a car accident three years ago which was serious enough for me to be awarded compensation. Since then, I have been made redundant from my job as a teacher due to cutbacks and as such am receiving benefits. I am due to receive a compensation pay-out soon and am in the same predicament. My benefits may well be cut or cancelled all together due to the fact I am unemployed and will receive compensation...
I think the people reading this quandary are missing the point that compensation is paid to someone to pay for their future care should they need it and also ease their mental anguish...it is not paid to support someone who is not working due to lack of jobs!!! I am going to do everything in my power to ensure my compensation is saved for my future care and not used for the government to shirk their responsibility to me as a tax payer! I have paid my taxes and worked unbelievably hard...the fact that my job has been cut should have nothing to do with whether or not I receive this money.
It frustrates me that people who work can receive their compensation yet people like me, who are going through the stress and unhappiness of unemployment, are penalised. Once again, I will remind you that compensation money is paid to support my future care which will, fingers crossed, not cost the NHS a penny.
Disgraceful isn't the word for some of these opinions...walk in my shoes then you might understand. This is a forum for people to help one another, not judge a moral question!!
You'd have been better to have started a new thread for your rant rather than sticking it on the end of one from 2010.0 -
The best advice is to see a reputable solicitor to arrange a trust fund. My compensation (£240,000+) was held in the fund and as such, it was not treated as capital. The Trust fund actually used part of it to part fund our home. It does get a little complicated when the trust buys assets with the money, but at least it is always there.
The balance in my fund will eventually be passed to the grandchildren in our wills.0 -
I find it hard to imagine it not being seen as deprivation of capital, after all, if the trust is set up specificially for the purpose of depriving yourself of the capital to get under the means test limit and get benefits, then its obviously intentional deprivation of capital.[greenhighlight]but it matters when the most senior politician in the land is happy to use language and examples that are simply not true.
[/greenhighlight][redtitle]
The impact of this is to stigmatise people on benefits,
and we should be deeply worried about that[/redtitle](house of lords debate, talking about Cameron)0 -
I find it hard to imagine it not being seen as deprivation of capital, after all, if the trust is set up specificially for the purpose of depriving yourself of the capital to get under the means test limit and get benefits, then its obviously intentional deprivation of capital.
You may think it should but Regulations do exclude monies held in trust (Discretionary) when looking at the capital position of a claimant.
Besides which why should a payment that is made to compensate for the injuries suffered have to be used to support them financially.
All or most (if they have had good advice & a good solicitor) recipients of damages will have their compensation tied up in this way. It is only the fools that will have it paid direct into their bank accounts and go out and buy everything and anything just because they can.
Making a moral judgement has no place in law.0 -
hi, i'm currently going to nat west to geta trust fund sorted. As the law states, when you recive compo for a PI, you shouldn't have to live off it! So it's quite right that it should be protected. Don't listen to these other fools, they obviously don't know the law on compensation pay-outs. I'm on means-tested benefits and the first thing my solicitor said was to set up a fund otherwise you will start to lose benefits. Basically the money you get shouldn't be for you to live on! If you think about it this way: if you had a job, would you be expected to give up your job if you received a payout - the answer is no. So been on means tested benefits is the same, why should you give them up -you shouldn't. Can you imagine someone getting 10 grand, & him saying to his boss, i'd to give up my job & live off my money, then can you re-employ me in a year's time - it's NOT going to happen in this world.
So get on & get a Trust Fund set up.
Regards, Tony0 -
tonybond1967 wrote: »hi, i'm currently going to nat west to geta trust fund sorted. As the law states, when you recive compo for a PI, you shouldn't have to live off it! So it's quite right that it should be protected. Don't listen to these other fools, they obviously don't know the law on compensation pay-outs. I'm on means-tested benefits and the first thing my solicitor said was to set up a fund otherwise you will start to lose benefits. Basically the money you get shouldn't be for you to live on! If you think about it this way: if you had a job, would you be expected to give up your job if you received a payout - the answer is no. So been on means tested benefits is the same, why should you give them up -you shouldn't. Can you imagine someone getting 10 grand, & him saying to his boss, i'd to give up my job & live off my money, then can you re-employ me in a year's time - it's NOT going to happen in this world.
So get on & get a Trust Fund set up.
Regards, Tony
If I had got a payout after my accident
I would have had to pay back my employers for all my sick time
As it is i get to go to work,earning less and paying out for private treatment a year on, without any payout
So glad you got a nice lump sum whilst being supported
do you understand the concept on means tested?0 -
What I can't understand is why isn't the compensation being declared.
Some 10 years ago my sister was hit by a transit van as she was walking on a pavement, the driver was drunk. She suffered from horrendous injuries, she was awarded DLA, MHR, HCR, housing benefit, Council tax.
She took the driver and his insurers to court, finally after 4 years she was awarded 500,000, but before the money was released to her from her solicitors, the solicitors had to pay back all the money she had recieved from housing benefit, etc etc.
So is this solicitor who is suggesting putting it into trust, being dodgy? or just thinking of the money he will make from it?
Yes, dodgy and probably trying to exploit a loophole. Big companies and high earners do this too and put the money in a trust and then the trust gives them a "loan" which is never repaid. Since it is a loan, it is not considered as income and hence no income tax paid.0 -
Yes, dodgy and probably trying to exploit a loophole.
Not a 'loophole' at all it is the law, the regulations clearly state that PI compensation in trust is disregarded for benefit purposes. In fact a solicitor who fails to advise this is liable to be sued for professional negligence.0
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