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Will a compensation claim affect my benefits?

If you receive a significant 'lump sum' compensation payment as part of a personal injury claim, then this can affect your entitlement in the future to receive certain means tested state benefits.

Calculating the value of a claim
Photo by Images_of_Money via Creative Commons

Means tested benefits take into account your income, savings and capital assets to assess your eligibility to claim.

Some means tested benefits currently include:

  • Housing Benefit
  • Council Tax Support
  • Pension Credit
  • Universal Credit

If the value of your injury compensation settlement (or its value added to your savings, assets etc.), falls within certain financial bracket, then it may have a bearing on the amount of benefits you can claim.

So for example, if upon receiving injury compensation your savings now total over £16,000 it may affect your eligibility to claim housing benefit or income support.

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Claiming compensation whilst on benefits

Being on a state benefit or any other kind of income support shouldn't prevent you from pursuing a claim for injury compensation. If anything, when budgets at home are tight, it's even more important to seek financial reparation after you've suffered an injury that wasn't your fault.

It is also worth remembering that if you have less than £6,000 in savings or other capital assets, then most means tested benefits remain unaffected.

Protecting your compensation and benefits with a personal injury trust

If you are concerned about your financial situation at the conclusion of your injury claim, we suggest that discuss this with your lawyer. Various options are available to protect compensation amounts, including setting up a Personal Injury Trust.

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