Personal injury compensation lump sum

berry61
berry61 Community Member Posts: 201 Contributor
in Universal Credit (UC)

Good afternoon everyone,

I'm asking about advice regards receiving a lump sum for a personal injury claim after a car accident and how it can affect U.C

I haven't been told the exact figure yet but it could be close or over the £16k limit allowed for UC claimants.

I understand if its over £16k then UC would stop , but what is the 52 week rule ive heard about where UC disregard the money for this period ?

Also if the sum is over £16k and I had to set up a trust what am I allowed to use the money for and how often can money be taken out.

I have taken a couple of pension lump sums out in the past 2 years which were under £6k each and these were accepted as savings under the £6k limit of aany money in our bank accounts.

Thanks

Comments

  • Rosie_Scope
    Rosie_Scope Posts: 9,442 Online Community Team

    Hi @berry61. This government PDF states that personal injury compensation payments are disregarded indefinitely if they're administered by the court or held in a trust.

    If neither of these things apply to you, personal injury funds are usually disregarded as capital for 12 months after they've been paid.

    After those 12 months, your claim would be likely be closed if you're still above 16k. If you're between £6k and 16k, your payments would be adjusted depending on your capital. And if you were back under £6k, there would be no change.

    It would be a good idea to get some legal advice if you're looking at putting the money in a trust. My understanding is that you can still access the money if you need it, but must go through your Trustees for approval first. How often you can do this might depend on the terms set out when the trust is established.

    From what I've read, most solicitors seem to recommend that the money is used for relevant costs like care, equipment or therapies. But this would definitely be something to ask about while exploring your options ☺️

  • CarNineSix
    CarNineSix Community Member Posts: 65 Contributor

    Many years ago, my mother worked in the "Dole" office. If people came onto large amounts of money, they were not allowed to "waste" it. Talk to your legal team and get their advice to make sure you don't fall foul in any way.

  • berry61
    berry61 Community Member Posts: 201 Contributor

    Thanks for the help and advice everyone, i will wait to see what the final amount will be then sort out the trust if needed.

Categories