Will a Personal Injury Claim affect my benefits?
A lot of people find benefits a sore subject to talk about. Some people like to keep their financial status to themselves but if you do receive benefits of any kind, and want to know the answer to – WIll a personal injury claim affect my benefits, then you need to read this.
You might think that winning a lump sum of compensation is the best result but please be aware that this can sometimes affect your future entitlement to receive certain state benefits including, housing benefit, council tax support, pension credit and universal credit.
If the compensation you receive raises your capital to over £6,000, whether that be all of your compensation of just an instalment of your total compensation, you could be affected.
Think of it as your compensation money has just taken the place of your state support. It’s not to say that when your savings drop below the capital limit you won’t be able to claim state benefits again but it is a possibility that your entitlement could be affected and by that time all your compensation money would be spent.
Also if the benefits your currently receiving are due to the injury sustained, then the insurance company that is paying you the compensation may have to pay the benefits back to the Government, which might come out of the total compensation you receive.
Now don’t worry, we aren’t stating that you shouldn’t pursue a claim just because you receive benefits because there is a way that you can avoid having to use your compensation to replace your benefits.
Protecting your compensation and benefits is a lot easier than you may think. By setting up a Person Injury Trust of which you can still be a named trustee, means you can still access the money but your entitlement to receive state benefits will also be protected.
Interesting fact… the Government usually ignores Personal Injury Compensation for the first 52 weeks after you are awarded it. And there are rules on how you spend your compensation money within that period of time.
So what if I spend the total or give the money away after the 52 week period and then reclaim my benefits?
If it was that easier then everyone would do it! But you will still be treated as if you still have the money, which means you would have spent your compensation and lost your acceptance for future benefits.
If you are in the situation and unsure of the best route to take, we suggest that you start by filling out the simple form below to find out how much compensation you could be entitled to and then seek advice from there.