Withy King can assist claimants to preserve the real value of the compensation they receive by placing it in a Compensation Protection Trust.
This type of trust can help the injured person retain present and future entitlement to means tested benefits, including Local Authority support. This is important because personal injury claimants are not fortunate, lucky lottery winners but tend to be ordinary people who have suffered medically and financially from an injury caused by someone else's negligence. They are likely to require extra levels of care and support in the future, be at a disadvantage within the employment arena and (as they get older) their needs are likely to increase. Personal injury claimants do not magically ‘get better’ when they recover their damages.
If the claimant’s partner is in receipt of means tested state benefits/support the partner's entitlement may also be affected by the payment of personal injury damages.
However, under the regulations, personal injury damages awards held in trusts are disregarded when assessing the claimant’s current and future entitlement to means - tested state benefits/support.
The amount of money or “disposable capital” a person can have before losing Income Support is currently £16,000. If a person has less than this but over £6,000, then benefits will be lost on a sliding scale. A person will only qualify for full State benefits if they have under £6,000.
The disregard of compensation placed in a trust is not a ‘loophole’. Government regulations recognise the special situation of personal injury claimants. It is happy for them to keep on claiming benefits if the compensation has been put into a trust ,so it is not mixed with the claimant's other funds and it can be clearly seen that the sum is made up of personal injury damages.
A 52 week disregard period has also been created, starting from the date of receipt of the whole or part of an award for damages from the personal injury claim. Accordingly, consideration should be given to establishing a Compensation Protection Trust before any interim payment/compensation is received.
Withy King has set up many Compensation Protection Trusts for claimants ranging from straightforward trusts of relatively small sums of money to multi-million pound settlements. We have professional trustees who assist in cases where substantial personal injury compensation is settled in a trust.
With many years experience helping clients to manage their personal injury awards, we have found that our Compensation Protection service assists clients not only with increasing the real value of their compensation, but also providing peace of mind and protection from misguided or unscrupulous individuals.
In one case, we were able to assist the recipient of a multi-million pound medical negligence award to retain means tested benefits and income from Independent Living Funds in excess of £40,000 per annum without touching the damages. In another case, we were able to persuade the claimant’s mother that she should retire as a trustee because she was putting undue pressure on her daughter to advance significant sums of money to her.
For further information please ask for our 'Guide to Compensation Protection Trusts' or contact Tracy Norris-Evans and Tony Spiers.
