Another question re benefits and compensation

HappyG1rl

My friend has made a personal injury claim. If she receives compensation will she lose her housing and Council tax benefit? What about her small amount of savings?

suelees1

Compensation for a personal injury isn't taken into consideration as capital for 52 weeks. If she was still left with more than £6k after a year then they would reduce her benefit by £1 pw for every £500 she has over £6K

suelees1

No problem at all. She can spend what she wants in the first year. After 52 weeks if she starts spending 'unreasonably' then they start to query it and look at whether she's deprived herself of capital in order to get benefits. Problem is there's nothing in the rules to say what is reasonable. Expensive jewellery etc is one of the things they might class as deprivation. One of my clients spent her savings on ridiculously expensive items including an £80 tablecloth! Obviously I'd agree with the DWP that was unreasonable.

We seem to be spending her compen even before she's got it!

If people are paid substantial damages for a personal injury again it's ignored for 52 weeks and even then they're permitted put it in a Trust where it'll be disregarded for benefit purpose. This type of trust is only one of very few which are ignored so people need to take expert advice.