Q&A - Does compensation for injury affect eligibility for state benefits?

Q:    I made a claim for compensation following quite severe injuries I suffered in an accident last year. The insurance company has now made me an offer of £30,000, but says it is unable to tell me whether the pay-out will affect my state benefits. Before I accept the offer, please can you explain the situation?

A:    Without more information it is not an easy question to answer. Firstly, is it your own insurance company who has made the offer, or is it the insurers of someone who perhaps caused the accident that resulted in you sustaining your injuries? Either way, it would be in your best interest to appoint your own solicitor to handle your compensation settlement.

The purpose of compensation for personal injuries is to ensure you receive sufficient money to enable you to live your life as closely as possible to the way you lived it before you sustained your injuries. For example, it might be needed to make adaptations to your home. Compensation money is not intended to be a source of income, so if you were receiving state benefits before your accident you should not lose out on that income source now.

Any money not spent within 12 months of you receiving your first pay-out will count as capital when assessing your eligibility for means tested state benefits. If some of the compensation is for future expenses, then it would be upsetting to “lose” some of that by losing benefits that you are entitled to. It is possible to set up a Trust in which money can be held and used for specific purposes, which would mean it would not be counted as either income or capital. A personal injury lawyer can provide further information and advise the best course of action for you to take.

Article 12/07/2021

This question has been answered by Robert Williams, a Partner with GHP Legal.  If you would like to speak to someone about this or any other legal matter it is still possible, and we are doing everything we can to ensure that we continue to offer our high levels of service to our clients.  In accordance with government guidelines, most of our lawyers are currently working remotely which means you may not now receive a response as promptly as you may expect. Please kindly bear with us and we will respond as soon as we are able.

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Robert Williams

Robert Williams

Partner and Complaints Handler

Partner and Head of the Civil Litigation, Personal Injury and Dispute Resolution team in Wrexham

Claire Parfitt

Claire Parfitt

Senior Solicitor

Senior Solicitor within our Civil Litigation team in Wrexham and Oswestry