UC & Personal Injury Payment

Yamor

https://forums.moneysavingexpert.com/discussion/comment/81917609#Comment_81917609

If the personal injury disregard doesn't apply, then yes.

For example, if someone is given a life interest in some assets/cash, and receives rental income/dividends/interest from that life interest, then that would count as unearned income and reduce their UC award.

HillStreetBlues

https://forums.moneysavingexpert.com/discussion/comment/81917706#Comment_81917706

I was just rereading the DWP letter does 2 contradict 1?

There are some differences between Universal Credit regulations 75 and 76,
largelyderived from the provisions in the legacy schemes. Specifically, a payment
of personal injury compensation has a general disregard for 12 months, after
which it must be used to purchase an annuity or be placed in trust (and then
income from annuity or the trust is specifically disregarded) whereas regulation
76 allows for an indefinite disregard.

Yamor

https://forums.moneysavingexpert.com/discussion/comment/81917748#Comment_81917748

There is an income disregard, but no capital disregard for the income once it has metamorphosed into capital.

I do think the reference in 1 to reg. 72(3) is wrong though, as it won't apply as per my earlier post.

HillStreetBlues

Thanks for all your help.

For my friend I don't think there will be any issue with the capital that comes from income. They will use their current capital that isn't disregarded (under £6k) along with some of the disregarded capital to buy a car. That would mean every bit of capital is disregarded. The future spending will be from their current account so mostly income will be spent (there isn't much left over), it will take a long time for that to get over the £6k for a tariff to be payable even if there is one.

Mine on the other had could push my undisregarded (if there is such a word) over £6k if they don't disregard the interest earned from the PI payment.
If they do start making a deduction then I will appeal and see where that leads.
I do think the law makers intended for payments such as interest to be disregarded because of the  PIDR that assumes a lump sum will earn a tariff to account for inflation.

HillStreetBlues

https://forums.moneysavingexpert.com/discussion/comment/81913829#Comment_81913829

There is now a section that allows for personal injury payments also with backdated benefits payments (there were others which I forget) I expect that is for possible disregards. M had also saved the CoL payments, but there was nothing for that so entered the amount in the backdated area.

As you suggested there was an entry in the journal. It stated that the PI payment was disregarded for 12 months, and the CoL payment indefinitely. Also requested a to do list to upload proof.

NedS

https://forums.moneysavingexpert.com/discussion/comment/81924002#Comment_81924002

That's good news that they have updated the process to allow some potential disregards to be highlighted when reporting capital.

HillStreetBlues

https://forums.moneysavingexpert.com/discussion/comment/81924023#Comment_81924023

Agreed.
But what is still annoying is that ask about all monies, yet it's capital that should be declared.
I told M to deduct their income from their current account and list that figure.