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Compensation payment query
Client was paid c.100k in compensation as a victim of abuse in Ireland. He saw the money as tainted and has given it all away, including to his son and to his brother who was terminally ill with cancer. He’s been held by both the DWP and LA to have intentionally deprived himself of this capital. As far as I am aware the capital was never held in trust (this is a detail I intend to double check). My understanding of trusts is very sketchy but I thought that the whole point of them was to stop the beneficiary doing what this client has done.
If the money was held in trust my understanding is that it should be disregarded as a personal injury payment - is this correct?
Otherwise does anybody have any ideas of any alternative to a straightforward deprivation appeal? I really worry about that option as whilst I feel client will give good oral evidence at tribunal, the amounts of money are so large and my initial impression is that it will be difficult to point to specific purposes for the disposals. If client loses appeal he is completely stuck as the amount of capital concerned is so large that it will take a long time to reduce under the notional capital rules. In the meantime he will have no way of supporting himself (I’m not sure whether it is an option to try and get the money back from his son).
Any suggestions would be most welcome.
two initial questions:
1. was the money put into a PI trust or not?
2. when was the compensation (or any first interim payment of it) paid to him?
1. Client wasn’t clear about this when I spoke to him. I would have thought that he had help from a solicitor in claiming the compensation and they would have put it in a trust for him. Is the formation of the trust in this situation just a technicality or are there trustees who would have been looking after the money for him? If the latter, I can’t see how they let him get rid of it like he has done.
2. August 2010
A solicitor would only have put it into trust for him if the solicitor understood benefits principles. Arguably it is negligence not to have done so, as this is something personal injury lawyers ought to know.
Am I right in thinking that such payments are disregarded for 12 months anyway? If so, did he give it away within that period? I don’t think you can be “done” for deprivation of disregarded capital, though I may be wrong.
But even if you can, it still has to have been part of the reason why he got rid of it that he wanted to qualify for benefit. Is there any documentary evidence of his motives?
“I don’t think you can be “done” for deprivation of disregarded capital, though I may be wrong.” This point was discussed, at some length, here.
1. Client wasn’t clear about this when I spoke to him. I would have thought that he had help from a solicitor in claiming the compensation and they would have put it in a trust for him. Is the formation of the trust in this situation just a technicality or are there trustees who would have been looking after the money for him? If the latter, I can’t see how they let him get rid of it like he has done.
2. August 2010
as to (1) you probably would have thought right, but as ariadne has pointed out not all sols are on the ball on this one.
2. if he got it in August 2010 he had until August 2011 to do whatever it was with it and after that it was anyway too late to put it in trust.
you need clarity as to whether there was a trust or not - get authoirty to find out from the sols -
otherwise, i rather agree with the other posts - its beyond credible that anyone would get rid of £100K for the sake of a measly £71 pw + HB/CTB, and a medical report as to his mental health would be appropriate.
and of course if that doesn’t work and the sols didn’t put it in trust (or, more to the point, ADVISE about a trust, as if they advised and he said no they’re not at fault) there’s always the sols to look to ....
a colleague had a similar case in a previous place I worked.
sorry I cant offer anything other than the good news that in that case that the decisions were eventually revised in the clients favour.