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PROTECTING ENTITLEMENT TOMEANS TESTED BENEFITS -
PERSONAL INJURY PAYMENTS
Lorraine Podmore
Richardson Laine Limited
OBJECTIVE – TO RAISE AWARENESS
• What do the benefit rules say about Personal Injury Payments?
• Personal Injury Trusts – What, When and Why?
• Court of Protection Disregards
• Pensioners
THE 52 WEEK DISREGARD
WHAT DO THE BENEFIT RULES SAY ABOUT PERSONAL INJURY PAYMENTS?
52 Week Disregard
• A personal injury payment that does not
come from a trust and is made because of a
personal injury is disregarded for 52 weeks
IS – Sch 10 para 12A IS Regs; JSA – Sch 8 para 17A JSA Regs; ESA – Sch 9 para 17 ESA
Regs; HB – Sch 6 para 14A HB Regs; UC – Reg 75(6) UC Regs
WHAT DO THE BENEFIT RULES SAY ABOUT PERSONAL INJURY PAYMENTS?
ESA – Sch 9 para 18 ESA Regs
17.—(1) Any payment made to the claimant
or the claimant’s partner in consequence of
any personal injury to the claimant or, as the
case may be, the claimant’s partner.
WHAT DO THE BENEFIT RULES SAY ABOUT PERSONAL INJURY PAYMENTS?
(2) But sub-paragraph (1) —
(a) applies only for the period of 52 weeks beginning with the day on which the claimant first receives any payment in consequences of that personal injury;
(b) does not apply to any subsequent payment made to the claimant in consequence of that injury (whether it is made by the same person or another);
WHAT DO THE BENEFIT RULES SAY ABOUT PERSONAL INJURY PAYMENTS?
(c) ceases to apply to the payment or any part of the payment from the day on which the claimant no longer possesses it;
(d) does not apply to any payment from a trust where the funds of the trust are derived from a payment made in consequence of any personal injury to the claimant.
WHAT DO THE BENEFIT RULES SAY ABOUT PERSONAL INJURY PAYMENTS?
(3) For the purpose of sub-paragraph (2)(c),
the circumstances in which a claimant no
longer possesses a payment or a part of it
include where the claimant has used a
payment or part of it to purchase an asset.
52 WEEK DISREGARDISSUES FOR CONSIDERATION
• Interim Payments
• Charitable Payments
• Purchasing an Asset
CAPITAL HELD IN A PERSONAL INJURY TRUST
What is a Personal Injury Trust?
CAPITAL HELD IN A PERSONAL INJURY TRUST
• Where a Trust Fund is set up out of money paid because of a personal injury to the claimant or their partner it’s value is ignored without a time limit.
IS – Sch 10 para 12 IS Regs; JSA – Sch 8 para 18 JSA Regs; ESA – Sch 9 para 16 ESA Regs; HB – Sch 6 para 14 HB Regs; UC – Reg 75(4) UC Regs
INCOME FROM PERSONAL INJURY TRUSTS
IS/IBJSA/IRESA/HB
• Payments from a Personal Injury Trust Fund are regarded as either income or capital. Income is disregarded, but capital payments count in full.
IS – Sch 9 para 15 IS Regs; JSA – Sch 7 para 15 JSA Regs; ESA – Sch 8 para 16 ESA Regs; HB – Sch 5 para 14 HB Regs
INCOME FROM PERSONAL INJURY TRUSTS
Payments Made on a Regular Basis –Voluntary Payments
• Payments from a Personal Injury Trust Fund
• Payments under an annuity purchased either under an agreement or court order from money from a PI payment or because of personal injury
• Payments made under an agreement or court order because of a personal injury
INCOME FROM PERSONAL INJURY TRUSTS
Payments Made on a Regular Basis –
Voluntary PaymentsIS - Sch 9 para 15(5A) IS Regs
JSA - Sch 7 para 15(5A) JSA Regs
ESA – Sch 8 para 16(3) ESA Regs
HB – Sch 5 para 14 HB Regs
INCOME FROM PERSONAL INJURY TRUSTS
Universal Credit
• Income from a Personal Injury Trust is disregarded (This means any regular payment for a specific period is disregarded, even if the payment is once a year).
• A lump sum taken from the trust will count as capital if this is not for a specific period.
Reg 75(4) UC Regs; Reg 46(3) UC Regs
TRUSTEES
• Trustees may have a discretion to use funds to
purchase items such as personal possessions that
would normally be disregarded as capital, eg. a
wheelchair or furniture.
• Trustees may also have a discretion to pay debts,
pay for holidays or educational or medical items.
COURT OF PROTECTION DISREGARDS
COURT OF PROTECTION DISREGARDS
• The value of a trust fund is ignored if damages are awarded for personal injury and the money is paid into a special fund administered by the court – eg, the Court of Protection
• As well as ignoring the capital value, income from these funds is also ignored
• Also applies where the fund is for children to compensate for the death of a parent (except for UC)
COURT OF PROTECTION DISREGARDS
Capital
• IS Sch 10, paras 44 and 45 Income Support Regulations ; JSA Sch 8, paras 42 and 43 Jobseekers Allowance Regulations; ESA Sch 9, paras 43 and 44 Employment and Support Allowance Regulations; HB Sch 6, paras 45 and 46 Housing Benefit Regulations; UC Reg 75(5) Universal Credit Regulations; All R(IS) 9/04; CP v SSWP (IS) [2011] UKUT 157 (AAC)
Income
• IS Sch 9, paras 15 and 22 Income Support Regulations; JSA Sch 7, paras 7 paras 15 and 23 Jobseekers Allowance Regulations; ESA Sch 8, paras 16 and 23 Employment and Support Allowance Regulations; HB Sch 5, paras 14 and 17 Housing Benefit Regulations; UC Reg 75(5) Universal Credit Regulations
PERSONAL INJURY PAYMENTS OVER PENSION CREDIT AGE
PERSONAL INJURY PAYMENTS OVER PENSION CREDIT AGE
• Any money paid because of a personal injury is
ignored whether or not it has been placed into a
trust
• Neither deemed income, nor actual income taken
from the fund is taken into consideration
PC – Sch 5 para 16(1) SPC Regs; HB – Sch 6 para 17(1) HB (SPC) Regs
PRACTICAL COMPLICATIONS AND CONSIDERATIONS
• Personal Injury Trusts
• Court of Protection Disregards
• Claimants over Pension Credit Age
PRACTICAL COMPLICATIONS AND CONSIDERATIONS
• Does the claimant need legal advice?
• Does the claimant need financial advice?
• Does the claimant need benefits advice?
• Does the claimant need community care
advice?
Richardson Laine Limited
SOAR Works Enterprise Centre
14 Knutton Road
Sheffield
S5 9NU
Tel: 0114 3997090
Email: [email protected]
