Compensation affect non-means test benefits?

Benefits_Bod

rach001 wrote: »

All I'm concerned about is if I need to tell the DWP about the payout and if they will take it from me? I simply wish to pay off some of the enormous debt I have with it as this will enable us to manage far better. The debt was incured from ill health and trying to stay afloat. Once the esa i currently recieve stops (supposedly in April) I will only get dla.

Straight answer: I don't know on this specific point. If in doubt, my advice is to inform the DWP (by either recorded delivery or, minimum, certificate of posting) explaining the amount and the reason(s) for payment. After that, you're covered under the law as it currently stands in terms of any subsequently alleged overpayment (unfortunately, there is a proposal to change the law to make all overpayments recoverable but, as things stand, disclosure of the material fact (specifically for ESA), is sufficient to protect you).

sleepless_saver

What the DWP decision makers guide says is:

This Chapter URL="http://www.dwp.gov.uk/docs/vol09.pdf"]chapter 52[/URL gives guidance on capital and its effect on ESA(IR). The ESA(Cont) that claimants may be entitled to is not affected by their capital.

which seems pretty conclusive to me.

sunnyone

You dont get the option of telling the benefits agency about it or not as your legal team have no choice but to tell them if it falls unders the guidelines, people dont get a penny till the goverment have had their share!

rach001

Sleepless Saver - thanks for the link, I'm still trying to find the relevant part but from what you have highlighted, does that mean I don't have to declare the compensation as I receive a non-means tested benefit? I do not have any savings, just debt due to losing my job and that desperately needs paying...

Sunnyone - I don't think the solicitor helping me knows that I am in receipt of any benefit but I will tell them if need be. Irrespective though, if they then go ahead and inform the DWP of my compensation, will they take it from me when I am in reciept of a contribution based benefit not means tested?

It's really worrying me and it's also upsetting as I simply wish to pay my debts, I don't understand why the DWP would take it from me - would they take it and stop the benefit even though it's contribution based???

bobajob_1966

rach001 wrote: »

It's really worrying me and it's also upsetting as I simply wish to pay my debts, I don't understand why the DWP would take it from me - would they take it and stop the benefit even though it's contribution based???

They would take it from you because if you are being compensated for loss of earnings, ESA is a replacement for earnings.

I would be surprised if such a low award had an earnings element in it, but the only person who can tell you that for sure is your solicitor. Had you followed my advice when I first gave it, you could have called them and got a definitive answer today.

saving_pennies

Benefits_Bod wrote: »

For Income Support, payments made from a trust derived from PI payments are disregarded as are payments received by virtue of either a court order or "any agreement".

For HB/CTB, the "trust" provision appears to be the same (at least in substance). But for direct payments, the FIRST payment would be disregarded for 52 weeks from the date of payment whilst further (non-periodical) payments would not be disregarded at all.

I'm sorry if my post is highjacking the OP - if necessarily I will start a new thread. I was just looking for further info on the above as this is of potential relevance to me. Like the OP I had an accident and currently the solictor is making a compensation claim. I am looking at a minimum of £3500, possibly more. Even if I got the £6000 in one go it wouldn't take me over the £6000 limit as I have a overdraft. The solictor said it can go in a trust but I am not sure what this means.

Can you explain further what this means: "from a trust derived from PI payments?" and how would compensation affect direct payments (are you saying that compensation paid in more than one payment will be classed as income)?

Benefits_Bod

saving_pennies wrote: »

...The solictor said it can go in a trust but I am not sure what this means.

Can you explain further what this means: "from a trust derived from PI payments?" and how would compensation affect direct payments (are you saying that compensation paid in more than one payment will be classed as income)?

Trusts are not my area at all - is your solicitor prepared to offer any advice without adding to any costs already incurred?

On the issue of "more than one payment", this is really only aimed at ongoing periodical payments of capital. In some circumstances, such payments would count as income. However, if there are simply one or two payments, that would normally count as as capital and, if it is capital, the question is then whether it can be disregarded.

If that is still confusing, feel free to repost.

sunnyone

rach001 wrote: »

Sleepless Saver - thanks for the link, I'm still trying to find the relevant part but from what you have highlighted, does that mean I don't have to declare the compensation as I receive a non-means tested benefit? I do not have any savings, just debt due to losing my job and that desperately needs paying...

Sunnyone - I don't think the solicitor helping me knows that I am in receipt of any benefit but I will tell them if need be. Irrespective though, if they then go ahead and inform the DWP of my compensation, will they take it from me when I am in reciept of a contribution based benefit not means tested?

It's really worrying me and it's also upsetting as I simply wish to pay my debts, I don't understand why the DWP would take it from me - would they take it and stop the benefit even though it's contribution based???

It comes up when your claiming compensation that you get benefits, no matter which because you are claiming for your reduced cercs, the docs you have seen must have asked you what you live on because its relevant especially in your case since youve given up work and they cant decide wether it was down to the accident or not, you solicitor has read all the medical reports (or should have!)

Its not you that pays the goverment back any benefits you have to repay, your solictor has told you that havnt they? You claim it from whoever is paying the damages to start with but it has to be done before you take anything "in full and final settlement" or you take the hit so talk to your solicitor ASAP thought from what you should be fine I would still make sure tomorrow to protect yourself.

saving_pennies

It's really worrying me and it's also upsetting as I simply wish to pay my debts, I don't understand why the DWP would take it from me - would they take it and stop the benefit even though it's contribution based???

I can understand. I have been worried on and off about this, usually when someone talks of benefits and compensation as it seems so complex to me. I have a similar situation of being in process of getting compensation and being on benefits, but different in the sense I am on means tested benefit and direct payments. I tend to get myself more and more worried especially if the person I need to ask isn't available until the next working day. It would be good for you to call your solictor to put your mind at rest. That is what I plan to do tomorrow.

It doesn't seem right that you lose your compensation to the benefits system and I really hope it can be disregarded.

saving_pennies

Benefits_Bod wrote: »

Trusts are not my area at all - is your solicitor prepared to offer any advice without adding to any costs already incurred?

On the issue of "more than one payment", this is really only aimed at ongoing periodical payments of capital. In some circumstances, such payments would count as income. However, if there are simply one or two payments, that would normally count as as capital and, if it is capital, the question is then whether it can be disregarded.

Thanks for replying. As far as I know I am not incurring costs as the other party admitted fault and will pay solictor fees (may be wrong but the solictor has not mentioned any fees to me!).

As for whether the payment can be disregarded, I guess that may depend on the final amount and how I receive it. I have written an email to my solictor stating my concerns and also outlining the care I get via direct payments as I am not 100% sure he is aware. I plan to phone him tomorrow before I send the email. I am concerned how having care will affect the compensation, I am sure I heard that if I have care provided then the compensation is used to repay the cost of the care, but then where would my compensation be for ending up being affected in a way that resulted in me needing such care.