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Title: Will benefits stop once I've claimed?

Date: 22 January 2015

Question

I have an insurance claim going on following an accident which I had nearly 18 months ago. It was a typical “sorry mate I dIdn’t see you” case. My beloved Daytona was written off which was fortunately fully comprehensively insured. I have also been paid out for my kit and my helmet. I am still not back to work as a self-employed plumber and have been on benefits since the accident. But with settlement approaching (we have a meeting with the Defendant’s legal team) I am wondering what will happen to my benefits if I receive what is likely to be about £100,000 in compensation? I am still not fit to return to work but don’t want to spend my compensation for day to day living as I need to save it for the future.

Gavin, Hayes

Answer

The short answer is that there is a way to continue to claim state benefits despite receiving a significant amount of compensation. However certain rules apply and steps need to be taken. You have not said whether or not you have received any interim payments to date and this may have a bearing on whether you can receive benefits despite receiving your compensation. The rules are slightly more complicated than this but the Trust has to be set up within 12 months following the receipt of an interim payment of £6,000 or more.

A Personal Injury Trust can be set up into which the compensation will be paid. Trustees are appointed to approve payments out of the Trust account. Once set up properly you can continue to receive benefits in addition to having the funds available in your Trust account to be spent as you feel fit subject to Trustee approval. Trustees should therefore be close relatives or trusted friends (or your solicitor plus one other).

If a solicitor fails to advise of the availability of a Trust and the client loses the entitlement to receive benefits as a result then a negligence claim against that solicitor may be considered to compensate you for that financial loss.

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