A compensation payout from the Criminal Injuries Compensation Authority (CICA) is normally a good thing. It means your criminal injury has been recognised and that you have received well-deserved financial redress for the harm you have suffered.
However, if you are claiming benefits – perhaps as a result of your injury as well – your compensation award may be bittersweet. Compensation payments can be large capital amounts and, as such, may have an impact on any means-tested benefits you and your partner receive.
Compensation and means-tested benefits
Means-tested benefits look at a person’s income and savings to determine if that person is eligible to receive the benefits in question. If your income or savings are above certain thresholds, it means you cannot claim those benefits, or that you might only receive reduced benefit amounts.
Many benefits are means-tested. The main ones are:
- Council Tax Support
- Housing Benefit
- Income-based Jobseeker’s Allowance
- Income-related Employment and Support Allowance
- Income Support
- Pension Credit
- Tax Credits (Child Tax Credit and Working Tax Credit)
- Universal Credit.
For example, with Universal Credit, if you or your partner have (between you) savings in excess of £16,000, you will not be eligible to receive the benefit. Also, the amount of Universal Credit you may receive will be reduced if you have over £6,000 in savings.
Compensation you receive from a CICA claim, or from other kinds of personal injury claim, will be taken into account with your other savings. So, in a worst-case scenario, a compensation payout may be large enough to stop your benefits (by pushing your savings over the threshold amount) but not large enough that you won’t require benefits in future.
Additionally, it may not just be your benefits which are affected. Because your partner’s income and savings are also taken into account with means-tested benefits, if you receive a compensation payment, it can stop or reduce your partner’s benefits due to the increase in your combined household savings.
However, the good news is that there are steps you can take to avoid these unwanted effects.
If you would like to discuss making a CICA personal injury claim, please get in touch. We are always happy to help and there is no pressure to proceed further.