I currently act for Mr H who is a left leg amputee who was thrown from his wheelchair as a result of the council’s failure to maintain the walkway to a reasonable standard. Mr H suffered injuries resulting in constant severe pain in his stump which is expected to be permanent. His final settlement will reflect the severity of his injuries and so is likely to be substantial.
Before his accident Mr H was already in receipt of Disability Living Allowance and Mobility Allowance. He was told by a neighbour that the benefits he received may be stopped once he received his compensation and he was understandably concerned. As Mr H would have received these benefits whether or not he had been injured, it would be unfair if these are withdrawn simply because he had suffered an awful injury.
I have advised Mr H that as his benefits are not means-tested they would not be affected by any compensation he received.
However, for those in receipt of compensation resulting from an accident it is important they tell their solicitor if they are in receipt of benefits and which ones they receive. For those who receive means-tested benefits like Income Support, income-based Job Seeker’s Allowance, Family Credit or Housing Benefit if a settlement increases any savings above £16,000 all entitlement to benefits will be lost. If a settlement increases savings to more than £6,000 benefits may be reduced.
There are some exceptions. For example, where a claimant is aged 60 or more personal injuries compensation is not taken into account for some of these benefits. In addition a “grace period” is allowed if the compensation received is small enough to be spent within the year after receipt.
Even if the claimant falls within one of these exceptions they should always tell the Department of Work & Pensions (DWP) when they receive their compensation. The DWP will know when a claim is settled and may well stop benefits until a claimant can prove they are in fact entitled to them.
If a claimant does not fall within one of these exceptions, then the benefits regulations state that they can still continue to receive means-tested benefits if the compensation is placed in a Personal Injury Trust.