Does Personal Injury Compensation Affect Benefits or Tax Credits?

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Will Receiving Personal Injury Compensation Affect My Benefits?

23rd August 2017

By Medical Negligence Solicitor Daniel Comerford

Receiving state benefits should not stop an injured person starting a claim for personal injury or medical negligence compensation.

However, there are circumstances where the compensation you receive will affect your benefits. Our guide below provides you with the information you need to see how your benefits might be affected and what you can do to protect your entitlement to them.

When Will Benefits Be Affected?

Your entitlement to receive certain state benefits will be affected if the compensation you receive brings your capital (or that of your family unit) to over £6,000. It doesn’t matter if that’s all of your compensation, or an instalment of it – if it increases your capital to over £6,000, you could be affected.

What Benefits Might be Affected?

Receiving money from a personal injury or medical negligence compensation pay-out may affect your eligibility to receive certain state benefits, or it may affect the amount that you are able to receive. This might include:

  1. Means tested benefits such as Universal Credit, Income Support, Income Based Jobseeker’s Allowance, income-related Employment and Support Allowance, Council Tax Support (sometimes called Council Tax Reduction) or Housing Benefit and any related ‘passport’ benefits such as free prescriptions, dental charges and eyesight tests.
  2. The amount of financial contribution, if any, you are expected to make towards any care you receive at home.
  3. The amount of financial contribution, if any, you are expected to make towards long-term care in a residential or nursing home or other setting.

How to Protect Your Benefits

Your compensation can be protected by setting up a Personal Injury Trust. A Personal Injury Trust is when compensation received from a personal injury or medical negligence claim is held in a Trust. It is managed by Trustees, of which you can be one. This means that you can still access the money, but your entitlement to receive state benefits will be protected.

If you are interested in setting up a Personal Injury Compensation Trust, our Personal Injury Solicitors can help you.

For free legal advice call our Personal Injury Claims Solicitors on 0330 606 9587 or contact us online and we will help you.

Call 0330 606 9587

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