Did you know that if you are in receipt of means tested benefits and you receive an award for compensation then those benefits can be stopped?
To be eligible for certain means tested benefits the Department of Work & Pensions [DWP] will look at how much capital (e.g. savings) you have. A compensation payment will therefore affect your level of capital and if you have over £6,000 those benefits payments may be reduced. If you have over £16,000 those benefits will be stopped completely.
If you fail to tell the DWP about the compensation award then that is Benefit Fraud.
If you are injured, through no fault of your own, and receive compensation of say £20,000 then if you were in receipt of means tested benefits you would no longer be able to claim them. This does not sound fair does it?
Well, fortunately, there is a way to protect your means tested benefits entitlement. By setting up what is called a ‘Personal Injury Trust’. This separates your compensation award from your savings and it is therefore not included in calculating your means tested benefits entitlement. By setting up this Trust you can continue to receive the same means tested benefits that you were before.
So, make sure to tell us if you receive any benefits so that we can put you in touch with people who specialise in setting up Personal Injury Trusts.
Andrew Walker – November 2014