Compensation money and benefits

randomobject

My partner is about to receive a compensation payout of over 100k for an accident he had 4 yrs ago. He's disabled and in receipt of IB and DLA. I currently dont work as i'm his main carer and we have 4 young children. We recieve CTC, council tax and housing benefit. My main concern is that my partner cannot work, atleast not for the forseeable future so i was wondering how this money will affect his IB and DLA. I know we wont get council tax and housing benefit, and i'm hoping to get part time work soon, as my kids are getting older so what about WTC? Will my partner be expected to use his money to live until it runs out? We were hoping to invest the money so our kids will have something when we're gone because its been hard on them too but the thought that the money will be all used up in a few years time terrifies me to be honest. I just want for my partner what he deserves, no more,no less.

I'd just like to add that, although the government gets back all the money that's been paid to us, if it wasnt for them i dont know where we'd be. We're thankfull we live in a society where our government helps those in need, its just a shame that many exploit the system and ruin it for those who truely deserve it.

KxMx

IB and DLA are not means-tested so those awards are safe. You may be aware that all those on IB will be transferred over to ESA (contributions based) if they pass the medical. If he gets put into the Work group, urrently the plan in to time limit this to one year, after which he would have to apply for ESA (income releated). With such a large amount of money he would not qualify after one year. So that would leave just the DLA as his income. If he gets into the support group then the time rules do not apply.

Perhaps you can invest some for the children and use the rest as a buffer when the benefits stop?

And as you are his full time carer, could you apply for Carer's Allowance if he gets middle/high rate care?

patman99

This will affect all your benefits.
First off, the DWP will stick-in a claim for all the benefits they have paid you since the day of the accident, then whats left will reduce the amount you can claim.

If I remember, there was a poster on another thread who mentioned some kind of scheme that would allow you to 'hide' the money in some kind of trust that would not effect your benefits. However, I have no idea if such a scheme would allow your partner to withdraw so much each year. Your partner needs to speak with the Solicitor handling the claim about this BEFORE the cheque is sent. This may involve stalling the payout whilst the paperwork is done, but would be worth it in the end financially.

pstuart

This has been covered before - try a search.

The compensation money is put into a trust and will not affect any benefits either now or in the future - speak to the solicitor who's handling the claim for you.

cosmic-dust

pstuart wrote: »

This has been covered before - try a search.

The compensation money is put into a trust and will not affect any benefits either now or in the future - speak to the solicitor who's handling the claim for you.

The compensation doesn't automatically go into a personal injury trust.

http://www.lindermyers.co.uk/personal-injury-trusts---some-faqs_754.html#b1q2

pstuart

cosmic-dust wrote: »

The compensation doesn't automatically go into a personal injury trust.

http://www.lindermyers.co.uk/personal-injury-trusts---some-faqs_754.html#b1q2

Sorry, should have said 'can be' not 'is' for you pedantic ones.


Again, do speak to your solicitor.

kazzah60

I believe the trust you are referring to is a Compensation protection trust which allows the compensation money to be disregarded for the purposes of claiming means tested benefits

you would need to speak to a lawyer about setting one up and you should do this as soon as the money is awarded.
You will need trustees to administer the trust and this would usually include a professional trustee such as a solicitor.

you should also ask your solicitor specifically to obtain a figure from the CRU unit for DLA and IB benefits which needs to be repaid to the DWP.
Then this amount should be included in your payment from the defendents so that they end up repaying the money as part of their settlement in order that you don't
hth
Karen

bobajob_1966

kazzah60 wrote: »

I believe the trust you are referring to is a Compensation protection trust which allows the compensation money to be disregarded for the purposes of claiming means tested benefits

you would need to speak to a lawyer about setting one up and you should do this as soon as the money is awarded.
You will need trustees to administer the trust and this would usually include a professional trustee such as a solicitor.

you should also ask your solicitor specifically to obtain a figure from the CRU unit for DLA and IB benefits which needs to be repaid to the DWP.
Then this amount should be included in your payment from the defendents so that they end up repaying the money as part of their settlement in order that you don't
hth
Karen

This is correct. Any award for loss of earnings cannot be protected by a PI trust, and should be paid by the solicitor directly to the DWP.

suelees1

The correct advice is that damages for a personal injury are ignored in their entirety for 52 weeks.

Within this 52-weeks period (from the date that you receive any payment even if only an interim one) you should then establish a Personal Injury Trust.

You can still draw from the trust once it's been set up. If it's not been set up you may then lose benefits

This is not hiding the money nor is it playing the system, it's the law. The trust is an umbrella for keeping the money safe, after all it's paid as compensation and really shouldn't be taken into consideration. Those handling the claim should give you all this info, after all they're paid well for this advice. If they don't they aren't doing their job properly.

suelees1

bobajob_1966 wrote: »

This is correct. Any award for loss of earnings cannot be protected by a PI trust, and should be paid by the solicitor directly to the DWP.

Any benefits paid to replace earnings is recovered by the CRU, not any damages for future loss of earnings, this is protected. In other words, benefit which has been paid to him because of the accident, right up to the time of payout will be recovered.

sunnyone

suelees1 wrote: »

The correct advice is that damages for a personal injury are ignored in their entirety for 52 weeks.

Within this 52-weeks period (from the date that you receive any payment even if only an interim one) you should then establish a Personal Injury Trust.

You can still draw from the trust once it's been set up. If it's not been set up you may then lose benefits

This is not hiding the money nor is it playing the system, it's the law. The trust is an umbrella for keeping the money safe, after all it's paid as compensation and really shouldn't be taken into consideration. Those handling the claim should give you all this info, after all they're paid well for this advice. If they don't they aren't doing their job properly.

Wrong the trust has to be established before you get the money, you cant do it retrospectivly and PI trusts are expensive and not the best for most people who want the freedom to do what they want with their own money.

I researched PI trusts before I got the money from the crash I was disabled in and they may allow you to keep means tested benefits but thats not the be all and end all, they dont earn you what a decent FA can and the proof is that ten years after my payout I still have threequaters of the capital left after buying a wheelchair freindly house and thats with all the problems with the financial markets, no PI trust would have performed as well or allowed me to spend my money on what I want too.

The disability/sickness benefits the OPs husband is on are the same as I am on so they are not affected by capital, yes changes are coming with ESA/UC/PIP but as I am severly disabled with investments Im not worried about it, we dont know what the OPs husband's disability is, £100k is a pretty small amount of PI for perminant disability so he may not be on sickness benefit for long and DLA is payable while in employment.