savings and benefits

bobthedambuilder

john10000 wrote: »

if i decided not to set up a trust fund i take it i would have to be honest and declare the money would i have to keep reciepts of all the money i spent in 52 weeks ?

I think things are getting a little confused here. Ideally, you should set up a personal injury trust as soon as possible after the award of compensation - preferably pay the compensation money direct into the trust, so there's no argument that it's come from anywhere else. You can only put compensation money into the trust. If you've already received the money and put it into your own account, you would need to take legal advice on how long after the award you could still set up a trust, but this may be where the figure of 52 weeks comes in.

You need to have a properly prepared trust deed - this could cost of the order of £500-600 + VAT by a solicitor. The money you received as compensation would then be transferred into a bank account set up in the trust's name.

If you set up what's known as a Bare Trust, you will be the sole beneficiary, and you can in essence use the money for whatever purpose you want. In theory, you should not be using it for day-to-day living costs (that's what the benefits are for), but pretty well everything else you've indicated in your original post should be OK. You may have to declare that you have a Personal Injury Trust when claiming the benefits, but it will definitely not be taken into account as a personal asset for means testing purposes.

If you don't set up the trust, the money is obviously taken into account for means testing purposes, which means you could lose all your entitlement to means-tested benefits until the assets run down to below £16K. I have no idea how much you are presently claiming on benefits, but set that against the £600 odd it takes to set up the trust and you can see how long it would take for it to be cost-effective.

john10000

thank you for your advice i understand now more clearly i was confused about the 52 weeks etc to spend the money, a trust fund is the best way will name my children as beneficiaries as long as there is no age limit will look into this next week thanx again

bobthedambuilder

If it's a Personal Injury Bare Trust, you don't need to name anyone other than yourself as a beneficiary. The compensation was presumably only paid to you, so you are the beneficiary. You can do with the money whatever you choose. Upon your death, the trust will dissolve and any remaining contents will become part of your Estate.

john10000

ok thank you again for ur honesty will name the trust in my will to go to my children in the event of my death, same thing i suppose either way they will both get that kick start in life which i feel so many children need unless the future holds better things for the younger generation i feel happy now thanx again much appreciated

dodger1

uponahill wrote: »

With Pension Credit, you could win £1m and it would never stop your benefit as they fix your benefit payments for periods up to life.

Even though PC is fixed for various times you are still required to tell them of a change of circumstance. If you don't and they find out you may well end up being prosecuted, especially as you'd have money to pay any fines.

nannytone_2

if part of the compensation payout covers for loss of earnings, the DWP may have a claim on part of it for benefit that they have already paid you.

john10000

loss of earnings is not included in that figure but understand dwp can claim some back on the figure awarded for that ,barclays agreed to set up account but wont finalise anything until they see the deeds of the trust so all looks good thank you to all for the expert help more importantly the legal side which is most important

bobthedambuilder

More information on the payback of benefits here: www.dwp.gov.uk/docs/gl27-print-version.pdf

It is usually the compensator's responsibility to deal directly with the DWP on this, and it is possible that your payment is net of the payback of benefits claimed from the date of the accident to the date when the compensation was paid. It is worth checking on this.

Zeery

Hello, if I receive a sum of money which I use only to pay off some credit card debt, does it need to be declared and will it affect my benefit?

nannytone_2

yes, it needs to be delared.

if you receive means tested benefit, it would be reduced for any amount over 6k, tapering ubtil at 16k, all entitlement to means tested benefit would stop.
why would you think that its ok to have money to repay YOUR debts ... but no money to support yourself?