state benefit awareness

When bringing a claim you need to be aware of the position with regard to the receipt of certain State Benefits and the effect that this will have on your claim.

The Compensation Recovery Unit

In personal injury cases, the defendants are obliged to inform the Compensation Recovery Unit (CRU), which is part of the Department for Work and Pensions (DWP) about your claim.

If you receive certain State Benefits as a result of your injury caused by the accident then the defendants are obliged to deduct and withhold an amount equal to those benefits from certain parts of your claim. This is often referred to as a "like-for-like" deduction and applies for example if you have received:

• Income Support, against a claim for loss of earnings
• Invalidity Benefit, against a claim for care and assistance
• Or losses against a claim for Industrial Injuries Disablement Benefit

The defendant’s insurance company are obliged as a matter of law to deduct and withhold the relevant amount, which has to be repaid to the state.

During the course of the claim and before settlement, the defendant's insurer will be obliged to obtain a certificate from the Compensation Recovery Unit confirming the total amount of deductible benefits that apply to your claim.

An interim certificate will be issued soon after the claim is commenced showing whether you have received any State Benefits to date. It will be important for you to check the certificate to ensure that only relevant deductions are made.

Trust Protection

Deductions are not made in respect of the part of the claim that relates to pain and suffering. If you receive State Benefits (now or in the future) that are dependant on your income and assets, and you receive compensation of more than £3,000.00 this may mean that you will no longer be entitled to receive those benefits. If this is the case, you may find it beneficial to ask your solicitor to set up a Trust to avoid losing benefits when your compensation is received.