It is important that when considering the settlement of a claim for compensation thought is given to any impact the claimant might suffer to any means Tested Benefits they might be in receipt of, such as Job Seeker’s Allowance or Universal Credit. Means tested benefits may be paid to a person who can demonstrate that their income and capital are below a certain level. This means that the amount of income and capital you have can affect their eligibility. Housing benefit or tax support takes into account any earned income, savings and capital between £6,000.00 and £16,000.00. It is important to know what if any benefits or tax support claimant is in receipt of.

If the claimant has savings of less than £6,000.00 then, whilst the settlement sum should be declared, it is unlikely to affect any means tested benefits. If the claimant has savings of between £6,001.00 and £16,000.00 then it is very likely to affect means tested benefits. Saving in excess of £16,000.00 is likely to affect the ongoing receipt of means tested benefits.

The failure to declare or disclose any monies received, such as a compensation award from a personal injury claim, could result in a large fine and/or a prison sentence, as well as any benefits or tax support being stopped. Everyone has a duty of care to make sure they are aware and that policies and procedures are followed correctly.

It is possible to legitimately protect a compensation awarded to ensure that means tested benefits are not affected. This is done by the creation of a trust. If you would like to know more about what we do to help people with compensation claims, or about how to create a trust to protect means tested benefits, please contact us on 01243 786668 or at [email protected]

Joe Gavin. Litigation Executive, Personal injury department

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