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Disregarded Capital

Pete at CAB
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Rather unusual case and as I am currently co locating in a Jobcentre I haven’t got access to Sweet and Maxwell until tomorrow.

Cl is on means tested benefits but is about to have a very large payment after a very protracted court case in an EU country. The case was, as I understand it, for damages after the negligence of a hospital caused her baby to be stillborn.

My own view is that this money is compensation and therefore ignored for one year/eligible to be put in a trust fund under the usual rules but is this affected by the fact that the actions of the hospital are probably not criminal (i don’t think anyone has been charged with anything) and the money is coming from outside the UK under the civil law of another EU state.

We have to advise the cl to declare it as soon as it arrives (and as it is available to her by simply giving her bank details so it can be transferred i expect that she would be treated as having it even if she didn’t pass on the details to get the payment) but we are trying to find out if such a declaration would have any effect on means tested benefits

Any past experiences, law or observations gratefully received!

[ Edited: 16 Oct 2019 at 12:33 pm by Pete at CAB ]
Tina M
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Regulation 75 of the UC Regs 2013 says

Compensation for personal injury

75.—(1) This regulation applies where a sum has been awarded to a person, or has been agreed by or behalf of a person, in consequence of a personal injury to that person.

(2) If, in accordance with an order of the court or an agreement, the person receives all or part of that sum by way of regular payments, those payments are to be disregarded in the calculation of the person’s unearned income.

(3) If the sum has been used to purchase an annuity, payments under the annuity are to be disregarded in the calculation of the person’s unearned income.

(4) If the sum is held in trust, any capital of the trust derived from that sum is to be disregarded in the calculation of the person’s capital and any income from the trust is to be disregarded in the calculation of the person’s unearned income.

(5) If the sum is administered by the court on behalf of the person or can only be disposed of by direction of the court, it is to be disregarded in the calculation of the person’s capital and any regular payments from that amount are to be disregarded in the calculation of the person’s unearned income.

(6) If the sum is not held in trust or has not been used to purchase an annuity or otherwise disposed of, but has been paid to the person within the past 12 months, that sum is to be disregarded in the calculation of the person’s capital.

Paul_Treloar_AgeUK
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Does R(SB)2/89 help at all?

Held that:
1. the expression “personal Injury” used m regulation 4(7) and 6(l)(k) of the Supplementary Benefits (Resources) Regulations 1981 must be given Its ordinary meaning and is in no way limited because a distinction is drawn between personal and criminal injuries (paragraphs 10 and 16);
2. the ordinary meaning of “injury” m the expression ‘{personal injury”includes a disease and any injuries suffered as a result of a disease (paragraph 15)

Pete at CAB
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Thanks both, very helpful

CDV Adviser
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I think you may need to look at the wording of the settlement i.e. is it payment for personal injury to the claimant or due to the death of the baby. With normal fatality cases you can’t put the money into trust as the injury happened to the deceased. If the award is split into e.g. an amount for injury to the mother (psychological trauma for instance) and an amount for the death of the baby, it’s possible that only the mother’s portion would be disregarded. The fact that it’s a payment from a hospital abroad and wasn’t criminal is immaterial. To take another view, if the baby was injured during birth rather than stillborn, the compensation award would be for the child.

Elliot Kent
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Phil R - 17 October 2019 08:37 AM

I think you may need to look at the wording of the settlement i.e. is it payment for personal injury to the claimant or due to the death of the baby. With normal fatality cases you can’t put the money into trust as the injury happened to the deceased. If the award is split into e.g. an amount for injury to the mother (psychological trauma for instance) and an amount for the death of the baby, it’s possible that only the mother’s portion would be disregarded. The fact that it’s a payment from a hospital abroad and wasn’t criminal is immaterial. To take another view, if the baby was injured during birth rather than stillborn, the compensation award would be for the child.

Fortunately I don’t think this is a concern, at least in English law, because our courts regard a stillbirth as an injury to the mother. See Wild v Southend University Hospital NHS Trust [2014] EWHC 4053 (QB) [20]-[23] on bailii.

[ Edited: 17 Oct 2019 at 07:37 pm by Elliot Kent ]
CDV Adviser
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Elliot Kent - 17 October 2019 07:34 PM
Phil R - 17 October 2019 08:37 AM

I think you may need to look at the wording of the settlement i.e. is it payment for personal injury to the claimant or due to the death of the baby. With normal fatality cases you can’t put the money into trust as the injury happened to the deceased. If the award is split into e.g. an amount for injury to the mother (psychological trauma for instance) and an amount for the death of the baby, it’s possible that only the mother’s portion would be disregarded. The fact that it’s a payment from a hospital abroad and wasn’t criminal is immaterial. To take another view, if the baby was injured during birth rather than stillborn, the compensation award would be for the child.

Fortunately I don’t think this is a concern, at least in English law, because our courts regard a stillbirth as an injury to the mother. See Wild v Southend University Hospital NHS Trust [2014] EWHC 4053 (QB) [20]-[23] on bailii.

Thanks Elliot, that’s helpful.