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Clinical Negligence Compensation

 

 

Soutergate
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Money Matters at Barrow Citizens Advice

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Morning,

Please could someone tell me if compensation from a clinical negligence claim is classed as capital or if it is exempt?

I cant find any regs etc to say either…

Thanks in advance.

     
ClairemHodgson
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it should be put in a PI Trust within 52 weeks of the first compensation payment (including any interim payments received before final settlement).  if it is put in a PI trust, then it cannot be taken into account for ANY means tested benefits.  If it is not put in a trust within said 52 weeks, then it can be taken into account for all means tested benefits.

So, if your client’s money is in a PI trust, it can stay there and can’t be taken into account at all by the LA, the DWP, or anyone else.

If it is not, and the relevant 523 weeks has not elapsed, it needs to go into a PI trust ASAP before the time is up

if it is not, and it is more than 52 weeks post first payment, then it is too late.

in that last event, your client needs to go back over the advice s/he received from his solicitor.  if s/he was advised to put it in a trust and didn’t, then tough.  should have followed the advice.

If s/he wasn’t so advised, that’s a different story and it is possible that the solicitor has been negligent in failing to advise…..

Does that help?

edited to add:
for IS, Reg 46(2) and para 12 of sched 10 to the Income Support (General) Regulations 1987
for HB etc, similar provisions in the relevant regulations, in the same wording….

      [ Edited: 21 Apr 2017 at 09:20 am by ClairemHodgson ]
HB Anorak
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The way I read para 14 of Sched 6 to the HB Regs, as long as the claimant can demonstrate that the funds are derived from the personal injury compensation they can be transferred to trustees at any time - even after the 52 week initial disregard period has expired.  Obviously there would be a period in which the claimant still holds the funds in a personal account after 52 weeks and they will be taken into account for as long as that remains the case, but it reads to me as if the disregard can be resurrected if the funds are subsequently moved to a trust.

Just to be slightly mischievous for a minute, transferring the money to trustees after it has ceased to be disregarded might raise questions about deprivation, but to be honest I cannot see why deprivation shouldn’t be an issue if the funds are transferred within the 52 weeks either: in both cases it seems to me the capital is being put into a disregarded form with the transparent motive of “securing” entitlement to HB (securing can mean either obtaining or preserving can’t it?).  Of course the claimant retains beneficial ownership of capital held by trustees and has therefore not deprived himself/herself of anything on the face of it, but R(IS) 7/98 said that moving money from a conventional account to one with an element of life insurance could amount to deprivation.  It has always struck me as a bit odd that no-one ever mentions deprivation when people are routinely advised to put compensation into a trust so that it can be disregarded for benefit purposes.  Surely it’s as clear a case of deprivation as you’ll ever see isn’t it?

Just playing devil’s advocate there, what do people think?

     
ClairemHodgson
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I think that argument could never succeed since the regulations specifically allow PI (including CN) compensation to be put into a PI trust for the specific purpose.

the same argument could be made regarding the other exceptions set out in the Schedule, but aren’t, because they are specifically legislated as exceptions.

the relevant HB regs are http://www.legislation.gov.uk/uksi/2006/213/pdfs/uksi_20060213_en.pdf, see Schedule 6, para 14 re PI payments (which includes clinical negligence)

     
Soutergate
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Thank you all…...

Client received the money in July 2016.

Was in receipt of Council Tax Reduction at the time ...didn’t declare the capital.

I’m assuming (though i know one should never assume!!!) regs will be the same?

 

     
ClairemHodgson
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Soutergate - 24 April 2017 08:45 AM

Thank you all…...

Client received the money in July 2016.

Was in receipt of Council Tax Reduction at the time ...didn’t declare the capital.

I’m assuming (though i know one should never assume!!!) regs will be the same?

still has time to put it in a trust and have it ignored. the regs are the regs…. money in a PI trust has been ignored for many years.
I suggest he goes back to his sols ASAP to get one set up.  it will cost him money to set it up, of course, as the cost of setting up a trust is payable by the client him/her self.