Large compo payout and ESA / DLA stuff

Parva

Hi guys, I was 50/50 on which board to put this on as it also qualifies for another one but here we go.

Long story short, I became severely disabled late 2011 and receive the highest rate of DLA and also ESA support group. This was as a result of medical negligence and after a near 5 year battle I am about to receive a 6 figure sum of money.

I've spoken to a financial adviser and we are going to go into more details next week regarding the specifics but I'm basically being advised to stay in my rented accommodation rather than spend a large portion of the compensation on a bungalow and to deposit say £10k into my bank account for day to day expenses and put the rest of the money into a trust fund where I would need two people to sign a cheque in order for me to withdraw money from that trust fund.

Doing the above ensures I continue to receive benefits, rather than dumping the whole sum into my bank account and giving up my benefits (I know I'd still get DLA regardless).

Before the haters jump on me, I'm not trying to milk the system! I've paid into it all of my life and as a consequence of the medical negligence that lead to this award, I have pretty much lost any chance of a 'normal' life.

I live in a rented house which is paid for by my benefits and whilst it's not ideal for me (it's a house, a bungalow would be far better), I'm still agile enough (just!) to live here for some years to come whilst preserving enough money to buy that bungalow in my later years as and when I need to.

Does anyone have any experience of such a situation? I'm not looking to take advantage of the system as it were and when I said 6 figures, we're at the lower end so I won't be becoming Alan Sugar either. My life-changing operation means that I am only ever going to find life harder in years to come (I'm 49 currently) so I'm trying to keep my options open.

Just wondered if anyone knows of Trust Funds and the possible advantages and pitfalls?

nobby1963

Hi,
You do need specialist advice.
As far as I'm concerned it would be a 'personal injury trust' and as you say it will allow you to continue to claim CERTAIN means tested benefits.

You are not milking the system, it's not your fault you are in your situation and any troll who tries to say otherwise should crawl back under their stone.

I hope you find the money a help & good luck.

Nobby.

DomRavioli

Have you confirmed that it is not deprivation of capital with the DWP directly? Their rules on this can be very sketchy at the best of times, you should always get something in writing from them before deciding what to do.

As someone who acquired disability at 25 through no accident (just bad genetics), I'm pretty annoyed you still want to get HB/LHA in rented accomodation - morally this doesn't sit well with a lot of people, and calling them "haters" might come across as not very nice. Also, you are milking the system, by not using the compensation for its intended purpose - your disability and the effects on your life both now and in the future - and continuing to do so won't make you any friends or do you any favours.

The first thing you need to do is get it in writing from the DWP exactly what you can and cannot do in your specific circumstances with regards to deprivation of capital - they can and will take benefits away if you are found in breach of the rules, and if your money is locked in a trust fund you may have to spend to get access to it in order to live off it, if that is how it is viewed by the DWP. Once you have that, then you can start with planning.

Trazy

Please be careful, my friend was given very similar advice and ended up in trouble with the dwp.

pmlindyloo

A few things to consider (although I am sure your solicitor has already covered these)

If you are claiming DLA and ESA as a result of your accident then these will be have to paid back (solicitor does this directly) so do check as 5 years worth will be quite a sum. However, you can still claim ESA and DLA from then on.

As regards your compensation money this is disregarded for 52 weeks so you have time to make decisions.

Looking at it from a financial point of view you may be better off buying a bungalow now which is suitable for your needs. The 52 weeks gives you time to look for something suitable and you may find something ideal for your requirements during the next few months.

If there is nothing suitable then put the money in the personal trust fund.

Buying a bungalow will give you a far better return for your money particularly if you have people that you want to leave something to when you die.

Also, living in rented accommodation is not very secure so better to be able to take your time to find somewhere perfect for you now and in the future rather than have to find somewhere in a rush.

You have been awarded compensation to make your life better so, personally, I would be using the money to do just that. No one knows what is 'round the corner' so live life to the full now.

By all means use the trust while you make up your mind but why 'just do' when you can make your life more comfortable?

missile

I have no issue with you claiming whatever you can. However you have been struggling for 5 years to get the compensation you deserve and I would suggest now is the time to enjoy the cash. Why tie it up? Spend it wisely to improve your quality of life.

hunters

One point, I work for an IFA and would suggest that they don't know the ins and outs of claiming benefits and would also suggest you check they are independant and not a tied agent.

Good luck with whatever you path you take.

Parva

DomRavioli wrote: »

As someone who acquired disability at 25 through no accident (just bad genetics), I'm pretty annoyed you still want to get HB/LHA in rented accomodation - morally this doesn't sit well with a lot of people, and calling them "haters" might come across as not very nice. Also, you are milking the system, by not using the compensation for its intended purpose - your disability and the effects on your life both now and in the future - and continuing to do so won't make you any friends or do you any favours.

Guess I saw that one coming. Of course I'm going to use the compensation for its intended purpose, which is to make my life a little easier. Things like going on holiday now take military planning and due to needing things like an adapted room and a myriad of other problems caused by being wheelchair bound plus the now way more expensive insurance costs means that even a simple holiday can quickly become very expensive. This house has been adapted for my needs so I am in no rush to get a bungalow just yet but the time will come further down the line when it will be necessary to get more suitable accommodation and this will likely need adapting at my expense.

Pmlindyloo - part of the settlement was that they are going to repay the DWP so I'm okay there.

Thanks for all of the advice guys, I'll certainly be going into all of this very carefully.

HB58

It's good to 'see' you Parva, you don't seem to have been around much of late.

I am so glad that finally, after a 5 year battle, you have got the compensation you deserve. I do hope this makes your life easier for many years to come.

Parva

HB58 wrote: »

It's good to 'see' you Parva, you don't seem to have been around much of late.

Hey HB58, you too buddy! I've always been sort of lurking a little but 'Andy' and his continuous BS stuff kind of wore me down and I grew tired of it all. That and as this thread implies, a long and drawn out battle with what was obvious medical negligence (for those wondering, I wasn't suing somebody because a flagstone had a slight lip on it and I tripped). It's been a tough few years, not to mention finding out that I had a 4 in 10 chance of dying within 5 years of my life changing op, a statistic I only discovered a few weeks ago! Almost done my 5 year term now (November 9th to be exact) so I'll hopefully be around a little longer.

kingfisherblue

Yes, good to see you back Parva. No advice to offer you, I'm afraid, but hope you're doing well.