Universal credit and compensation payment

[Awiane]

Hi
Im receiving a payment of 18000 pounds, when I tell UC will they stop my Uc completely or after 52 weeks

Well of course I'd have enjoyed it had circumstances been different as everyone would! wouldn't you fgs!

It's 12 months from the first interim payment, not the final payment though (if OP had an interim payment).

This is only true if you have sold a house and the money is earmarked to buy your next home.

Sorry I didn't make this clear i was in a car crash last year. This is a personal injury compensation

This is for a personal injury compensation

If you have debts such as credit cards or loans you can settle these without penalty. You can also use the money for household repairs or essentials (bed, fridge, freezer, cooker etc. Do you need a new boiler, heating system, repairs to your roof, plumbing etc?

You have 12 months disregard on PI compensation, from the date of your first payment (if you had any interim payments, it's from the date of the first of those).

From the Gov site....

Personal injury and illness compensation
Personal injury and illness compensation payments are not taken into account for the first 12 months after you receive them.
After 12 months, only personal injury or illness payments which are put into a trust or used to buy an annuity are not taken into account

Its hard to understand how having £18k in the bank could possibly be difficult until you find yourself in the situation. To answer your question - you need to update UC and they will decide whether to disregard it for 12 months or stop UC payments completely. It's at their discretion. All you have to do is be upfront and honest.

I found myself in a similar situation. Received a compensation payment that was intended to for tuition fees (as I am not longer eligible for sfe) so I can finish my degree. However, being a solo mum to a 1 year old, I can't afford childcare on top of everything else with the salary I would be on. Without an income I can't rent privately or get a mortgage so I have no choice but to stay with friends/family until I have used up my tuition fee money to go below the UC threshold to enable me to return to work. At the moment I am being forced to use the money that was needed as a long term solution to ensure I didn't ever need to depend on UC for something for daily expenses, reducing the possibility of social mobility. So yes, it's not always cut and dry. Having a significant amount of money on the bank isn't always a good thing.

That's tough.
Can you gift half into a trust fund for your DC or buy a new car.
In Ireland 20,000 of capital savings is ignored when claiming social welfare.

It's at their discretion.

It's not meant to be. The rule is clear that if it's personal injury damages, it's disregarded for a year. (That year running from the first interim payment, or settlement if no interims are paid.)

Next time, go to a benefits adviser or a specialist benefits forum as people on here are clearly far too comfortable advising on matters they know nothing about.

I'm a personal injury solicitor. I know the rules around this.

This is a really good explanation as it tells you the rules and also your obligations re the DWP.

The DWP already know you have a PI claim, as all claims have to be reported to them. Defendants are liable to pay back NHS charges and benefits paid (to date of settlement) as a result of the accident. They will also know the date of settlement as, again, this is reported to them.

Assuming the OP has had no interim payments more than a year ago, she should call the DWP the day she gets her money to tell them she has it, where it came from, and how much it is. If she had an interim less than a year ago, she should also tell them this, as that's when the year runs from.

If she had an interim payment more than a year ago then she's not entitled to any disregard and needs to report it as capital. She can pay off any debts prior to this though, or have essential household spending, before she gives them the figure. They may look into these to make sure it's not deprivation of assets though.

So i have credit card debt , if I pay that of that'll bring me under 16000, would you recommend a trust fund?

I can't give you financial advice as I'm not allowed to. Trust funds are usually for high value settlements, however, due to the cost of setting up and administering them.

You can speak to one of the trust providers and ask their advice, as they're allowed to provide this, however.

Oh yes, that is clear and the OP is very fortunate to have you. I was referring to the people saying it would stop immediately with no concept of why there may ever be a 52 week disregard.

People chip in on this type of thing all the time! Including legal advice. It's mind boggling how confident people are in their wrong advice!

You need to let them know, personal injury compensation is disregarded for 12 months ( 52 weeks ) be careful how you spend it during this time though.

From the first payment. If she had an interim payment the clock is already ticking (or the time may even have passed).

Yup, I agree. From personal experience, however, it doesn't always work in practice. You might have to fight the system, even though you shouldn't have to.

@NoWordForFluffyplease can I ask you if critical illness payment from an insurance policy would be dealt with in the same manner? It will most likely be used for nursing care and equipment, plus living expenses as DH wouldn’t be able to work at certain times.

I believe life insurance can also be paid out prior to death too. Now that’s the money that I would love DH to be able to spend on a bloody good holiday. And gift to the DC obviously (which is stipulated in will).

I have no idea, sorry, @AHeadlineWaitingToHappen. My gut feeling is not, as the whole point of the insurance is to pay for living costs if you fall ill.

Our life insurance pays out if diagnosed with certain illnesses. But less than the amount on death, so that's something to be wary of.

Here is the capital disregard document from the government (can also be used to tell the DWP they're wrong about a decision!):

assets.publishing.service.gov.uk/media/6894a1a7a6eb81a3f9b2e227/adm-chaper-h2-capital-disregards.pdf

That’s a really useful link thank you! It does say life insurance is disregarded, so it could go to my DC which was my intention originally.

And for anyone judging, DH will just continue to live on earnings which are so low we claim UC. He has saved the state an actual fortune doing the caring for me and still trying to work so he is exhausted. My DC all work and pay tax so they’re doing their bit. I’ve paid the CI and life insurance premiums for years and years with the intention being able to gift it to them.