Will my benefits be affected?
When you first visit a solicitor regarding your medical negligence claim, it will be difficult for them to determine how much compensation you are likely to receive as they have to take into account any social security benefits you may be redeeming, including income Support and sickness benefits. Benefits you receive may affect how much compensation will be rewarded to you.
Benefits claimed as a result of the injury may be deducted from the amount of any compensation awarded. The amount of these benefits is effectively included in the claim against the third party and therefore there is no real loss following repayment. The following benefits may be repayable to the DSS:
- Income Support;
- Invalidity Pension;
- Invalidity Allowance;
- Job seeker’s Allowance;
- Reduced Earnings Allowance;
- Sickness Benefit;
- Statutory Sick Pay;
- Unemployability Supplement;
- Unemployment Benefit;
Benefits that are not means tested (such as Incapacity Benefit or Industrial Injuries Disablement Benefit) are not affected in this way and you will continue to receive them for as long as you are medically entitled.
If your means tested benefits and compensation award brings in over £6000, your entitlement to benefits could be affected. Usually, your benefits will reduce by £1 for every £250 that you have over the £6000 limit. A compensation award of £16,000 or more will mean you will no longer be entitled to receive means tested benefits.
To avoid this problem you can set up a trust and pay some of the compensation into this trust. The DSS will ignore the money in the trust when calculating whether you are entitled to benefits.
What is a personal Injury Trust?
Setting up a personal injury trust will guarantee you receiving your compensation while retaining your means-tested benefits entitlements. Personal injury trusts are recognised by the Department of Work and Pensions and Local Authorities.
When setting up a trust you need to consider who you want to appoint as trustees. Trustees are able to look after things, if you are unable to look after them yourself. Your trustee can be a friend, a relative, or a professional adviser.
Different types of trusts are available so it is important to find the right one that suits you. You need to be aware of the implications of having a trust, for example you may be asked to submit an annual tax return.
There are ways you can protect your on-going benefits so do not hesitate to contact your local medical negligence solicitors for further options and advice regarding your rights.