Compensation recovery scheme – recoupment

State recovery of benefits paid after accident or injury – recoupment of benefits

The State can recover benefits paid after accident or injury, if the person injured brings a successful claim for compensation. Recovery is only possible if the compensation case is successful, as the Government cannot bring its own separate action.

The benefits are recovered from the “compensator,” which means the insurance company or Defendant who has to pay compensation. Let us explain how this works.

The duty to repay reasts with the compensator, not with you as the injured person. The payment is made in addition to your compensation, not from your compensation.

Within the calculation of your financial loss, some or all of the benefits received can be deducted from your compensation. As an example, let’s say you bring a case following a workplace accident. You have lost eight weeks work at £200 per week. You have received £60 each week in benefits, so your actual loss each week is £140. You claim £140 each week from the Defendant. Your case for compensation is successful, so you receive £140 per week as part of your settlement and, in addition, the Defendant’s insurer pays back the £60 you received each week to the Government. You only have to give credit for certain benefits against certain aspects of your financial loss, so the amount paid by the compensator to the government is usually greater than the amount of credit given in your financial loss calculation. More detail follows.

Added protection for the Claimant means no credit for benefits is given against compensation for the injury, only specific items of financial loss on a like-for-like basis. This is a complicated subject called offsetting and recoverable benefits are set out on the Government’s website as follows.

Compensation in respect of loss of earnings during the relevant period may be reduced where the following benefits have been paid to meet the same need:

  • Disablement Pension payable under section 103 of the 1992 Act (also known as Industrial Injuries Disablement Benefit)
  • Employment and Support Allowance
  • Incapacity Benefit
  • Income Support
  • Invalidity Pension
  • Invalidity Allowance
  • Jobseeker’s Allowance
  • Reduced Earnings Allowance
  • Severe Disablement Allowance
  • Sickness Benefit
  • Statutory Sick Pay paid before 6 April 1994
  • Unemployability Supplement
  • Unemployment Benefit
  • Universal Credit

Compensation in respect of cost of care may be reduced where the following benefits have been paid during the relevant period:

  • Attendance Allowance
  • Care Component of Disability Living Allowance (DLA Care)
  • Disablement Pension increase for Constant Attendance Allowance
  • Exceptionally Severe Disablement Allowance
  • Living Component of Personal Independence Payment (PIP L)
  • Nursing care and attendance (including holiday/respite care) and the inability to cook may fall within Schedule 2.

Compensation in respect of loss of mobility may be reduced where the following benefits have been paid during the relevant period:

  • Mobility Allowance
  • Mobility Component of Disability Living Allowance (DLA Mobility)
  • Mobility Component of Personal Independence Payment (PIP M)

Travel to hospital for treatment and additional costs of travel that may fall within Schedule 2 include:

  • vehicle costs
  • powered wheelchair costs
  • costs of adaptations to transport
  • taxi and bus fares (where paid as a result of accident, injury or disease)
  • increased cost of a car
  • additional costs incurred for holiday travel

Payment into court forms (now called Part 36) require the compensator to list the benefits which have been offset against the above heads of compensation.

The information above was taken from a Government website and to see in full the main principles of the Scheme I suggest you follow the link.

The recovery of State benefits, or recoupment as it is known, can be complicated. An experienced personal injury compensation solicitor will understand your financial position and will have helped with the State benefits you have received. The recoupment of these benefits should be explained to you when your compensation case is valued, before any offer to settle is made. If you continue to receive benefits, or want to preserve your ability to claim such benefits or obtain financial support for care, you should seriously consider a personal injury trust to protect your entitlements.

There is nothing wrong with the Government following the principle that the wrongdoer should pay, but if a compensation claim has to be made for the Government to recoup its benefits payment it should thank the Claimants, not criticise them.

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