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Compensation payout - On benefit due to injury so Solicitor advises Ring Fencing
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# 1
james2005
Old 11-11-2010, 7:53 AM
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Default Compensation payout - On benefit due to injury so Solicitor advises Ring Fencing

Hello my friend has received a medical negligence compensation payout and the solicitor has recommended they ring fence it by putting it into a trust, which means appointing trustees and therefore this will not affect there entitlement to benefits as the payout exceeds the savings amount.

Has anybody any experience with these, any disadvantages/advantages?

I suppose the disadvantage is the solicitor is holding my money, can my friend be ripped off.

What sort of fees are payable for administering it as I am sure its not free of charge?

Whats the best way forward...

Many thanks
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# 2
dave030445
Old 11-11-2010, 8:38 AM
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Why not come off benefits and pay your own way in life with this payout. Why should the tax payer still pay for you when you have all this money.

Last edited by dave030445; 11-11-2010 at 2:10 PM. Reason: Spelling
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# 3
james2005
Old 11-11-2010, 8:44 AM
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Firstly Its not that much, its over the threshold thats all. And its compensation for not earning for 2 years, it doesnt really compensate.

My friend is still unable to work, if she was she wouldnt be on benefits, She hates it! She have been volunteering at cancer research for 25 hours per week

If I want you silly comments I will ask you so jog on.

sod off and go and annoy someone else

Last edited by james2005; 11-11-2010 at 8:49 AM.
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# 4
james2005
Old 11-11-2010, 8:51 AM
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Its Benefits not benifits.

"And why should the tax paying still pay for you"

You dont make sense, what are you on the booze this hour of the morning Dave!


Quote:
Originally Posted by dave030445 View Post
why not come of benifits and pay your own way in life with this payout why should the tax paying still pay for you when you have all this money
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# 5
AnxiousMum
Old 11-11-2010, 9:05 AM
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Isn't the compensation payout paid so that a person can help provide for themselves whilst not working due to the problem they have incurred? It's not a rainy day savings account - it's money that is supposed to help make her days more bearable and manageable in a financial sense.

Your friend is able to volunteer 25 hours per week but not work?

Don't know anything about the 'ring fencing' or the costs involved........but her life would be alot more stress free I'm sure if she had use of the money for her day to day expenses rather than having to rely on handouts when she has received compensation.
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# 6
james2005
Old 11-11-2010, 9:07 AM
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She is entitled to this! anyone actually know the answer or just more uncalled for comments?

Yes the charity suits her well as she just has to greet people, anyway due to her rural location there isnt any work only factory work which she is unable to do.

I hope that helps Anxious Mum!

Anyone actually know the answer?

Last edited by james2005; 11-11-2010 at 9:11 AM.
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# 7
skintbint
Old 11-11-2010, 9:19 AM
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benefit system asks for details of trust funds so am thinking they will take it ito account, as its still her money.They will also look at wilful disposal of capital, in other words she chose to do this so her benefit can still be paid, doesnt usually bode well for benefits as she has the means to support herself but has chosen not to use them.
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# 8
kingfisherblue
Old 11-11-2010, 9:20 AM
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Even if she is entitled to the compensation - and nobody has said otherwise - she may not be entitled to benefits any longer as she is over the threshold. Once she is below the threshold, she can reapply for benefits.

Also, being rude to posters who take the time to answer will not help. AnxiousMum makes very valid points. Dave may not be able to express himself as clearly as you would like, but there are many people who have difficulties with language. If you read his post slowly, you will understand what he is saying.
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# 9
james2005
Old 11-11-2010, 9:32 AM
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I havent been rude to anxious mum, I answered her questions, Cant understand Dave!!

Its ok I have the answer from the claims forum, thanks ever so much for all your help.

Quote:
Originally Posted by kingfisherblue View Post
Even if she is entitled to the compensation - and nobody has said otherwise - she may not be entitled to benefits any longer as she is over the threshold. Once she is below the threshold, she can reapply for benefits.

Also, being rude to posters who take the time to answer will not help. AnxiousMum makes very valid points. Dave may not be able to express himself as clearly as you would like, but there are many people who have difficulties with language. If you read his post slowly, you will understand what he is saying.
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# 10
DX2
Old 11-11-2010, 10:25 AM
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James google Personal Injury trusts
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# 11
DX2
Old 11-11-2010, 10:27 AM
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Why Should I have a Personal Injury Trust?


If you are in receipt of means tested benefits then you should consider having Linder Myers Solicitors set up a PI Trust for you. The following are means tested benefits:

· Income Support
· Housing Benefit
· Council Tax Benefit
· Working Families Tax Credit
· Disabled Person’s Tax credit
· Income Based Jobseeker’s Allowance

As a general rule – if you have over £6,000 at your disposal you are at risk of having your benefits reduced. If you have over £16,000 then you are at risk of losing them entirely. If your compensation is paid directly to you then you will be classed as having this money at your disposal.

Therefore, if you are going to be receiving more than £10,000 in compensation you should give serious thought to having Linder Myers set up a PI Trust fund on your behalf. If you are expecting to receive less than £10,000 you should discuss it with us as it may still be cost effective to set up the trust.

Finally, if you think you may need to go into residential care at some point in the future, the setting up of a PI Trust will protect your compensation from being taken away by the Local Authority in order to pay for your care.
http://www.lindermyers.co.uk/article.asp?id=412
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# 12
Caz3121
Old 11-11-2010, 11:27 AM
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they should also be aware that they may have to repay the benefits they have received prior to receiving the payout - hopefully the solicitor has accounted for this and the amount you are saying they will be receiving is in addition to the repayment of benefits
http://www.dwp.gov.uk/publications/s...nd/1.-the-law/
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# 13
Jowo
Old 11-11-2010, 12:45 PM
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It's a complicated area, your friend should seek expert advice, perhaps contact Enable?

Trusts and trust funds

Whether or not assets held in a trust can be disregarded as capital seems to be determined by whether the beneficiary of the trust has or can have direct access to them. If they do not, the assets of the trust will be ignored for benefit purposes.
The assets in a discretionary trust, (which do not permit the beneficiary to control the assets), are not treated as capital, however any capital that is given to the beneficiary by the trustees, will be treated as capital.
Assets of non-discretionary trusts, that is, trusts over which the beneficiary can control the assets, will be regarded as capital. There is more information about trusts at XXXXX
Where a trust fund has been set up as a result of personal injury compensation, the fund will be disregarded if it has been awarded directly to the benefit claimant. However, usually, if the compensation has been awarded to a member of the claimant's family, such as child or partner, it will be treated as capital. There is no need for the trust to be set up by a formal deed.

http://www.ownershipoptions.org.uk/h...1/01006020.php

You could research some of the DWP guidance to its decision makers to understand how it will be treated for the purpose of means tested benefits. For example,

http://www.dwp.gov.uk/docs/hbgm-bw1-...of-capital.pdf
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# 14
tomitma
Old 11-11-2010, 2:47 PM
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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?
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# 15
dmg24
Old 11-11-2010, 3:06 PM
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Quote:
Originally Posted by AnxiousMum View Post
Your friend is able to volunteer 25 hours per week but not work?
I agree, I can't see the difference between 25 hours in voluntary work and 25 hours in an office. I could understand someone doing a few hours to get them back into a work pattern, but 25 is near full time!
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# 16
skintbint
Old 11-11-2010, 4:02 PM
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Quote:
Originally Posted by dmg24 View Post
I agree, I can't see the difference between 25 hours in voluntary work and 25 hours in an office. I could understand someone doing a few hours to get them back into a work pattern, but 25 is near full time!
i agree however am sure there will be a medical assesment looming where the OP's friend can let them know how well she is doing. I hope she has declared her voluntary work to the JCP as even although she is not getting paid for it, it still has to be declared.
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# 17
Gemstar30
Old 11-11-2010, 4:19 PM
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Quote:
Originally Posted by Jowo View Post
It's a complicated area, your friend should seek expert advice, perhaps contact Enable?

Trusts and trust funds

Whether or not assets held in a trust can be disregarded as capital seems to be determined by whether the beneficiary of the trust has or can have direct access to them. If they do not, the assets of the trust will be ignored for benefit purposes.
The assets in a discretionary trust, (which do not permit the beneficiary to control the assets), are not treated as capital, however any capital that is given to the beneficiary by the trustees, will be treated as capital.
Assets of non-discretionary trusts, that is, trusts over which the beneficiary can control the assets, will be regarded as capital. There is more information about trusts at XXXXX
Where a trust fund has been set up as a result of personal injury compensation, the fund will be disregarded if it has been awarded directly to the benefit claimant. However, usually, if the compensation has been awarded to a member of the claimant's family, such as child or partner, it will be treated as capital. There is no need for the trust to be set up by a formal deed.

http://www.ownershipoptions.org.uk/h...1/01006020.php

You could research some of the DWP guidance to its decision makers to understand how it will be treated for the purpose of means tested benefits. For example,

http://www.dwp.gov.uk/docs/hbgm-bw1-...of-capital.pdf
Absolutely correct!!!
Where a trust fund has been set up as a result of personal injury compensation, the fund will be disregarded if it has been awarded directly to the benefit claimant.

I received a settlement some time ago under the Criminal Injuries Compensation Scheme which ran well into 6 figures. The money is as you have described been put into a trust to help me out when and if needed. My main concern because of my age is the care home factor. They can't touch it if and when the time comes.
Yes a deduction under the Compensation Recovery rules was made and was paid over to the DWP before the money was received.

I don't have much need for the compensation due to ill health, but it will be very useful for my grandchildren later in life.

Yes please do take up proper legal advice.
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# 18
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Old 11-11-2010, 4:26 PM
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So "your friend" (even though you said "the solicitor is holding my money", which I'm unsure is a Freudian slip or not) is able to work 25 hours a week, has just received a huge payout, but basically wants to hide the money so they can still receive taxpayer handouts.

I see.
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# 19
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Old 11-11-2010, 4:54 PM
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Quote:
Originally Posted by kingfisherblue View Post
Even if she is entitled to the compensation - and nobody has said otherwise - she may not be entitled to benefits any longer as she is over the threshold. Once she is below the threshold, she can reapply for benefits.

Also, being rude to posters who take the time to answer will not help. AnxiousMum makes very valid points. Dave may not be able to express himself as clearly as you would like, but there are many people who have difficulties with language. If you read his post slowly, you will understand what he is saying.
We've been through this before,moaning posts aren't advice or help.
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# 20
sunnyone
Old 11-11-2010, 7:06 PM
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Quote:
Originally Posted by tomitma View Post
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?
Same here, I was a passenger in a car in 1992 that had an accidnet and I got a big compensation payout, the goverment got their bit before I got the money and while I dont object to the recovery of most of it I do to the recovery of DLA, I didnt want a double dip but I was still disabled and I should have kept that part of the compensation recovery.

I bought a wheelchair accessable house,
suitable car and I have used the rest to live on since, thats what the money was for.
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