Compensation recovery scheme – recoupment

Compensation recovery scheme

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 teh 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 teh compensator to teh 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.

Author: Mark Thompson

Personal injury and accident specialist solicitor

28 thoughts on “Compensation recovery scheme – recoupment”

  1. Hi Mark,
    I have received a CRU certificate for a PI claim I am pursuing. I have been in receipt of ESA & PIP for a number of years for health and mental health issues. I have not claimed any benefits for my injury, nor informed the DWP of my accident. So I don’t understand why or how they want to claim back benefits ‘paid to me’ as a result of my injuries. The benefits I receive have absolutely nothing to do with my injury/claim. Can you advise?

    1. The liability to repay benefits rests with the defendant, not with you.
      The CRU certificate tells the defendant how much it must repay to the DWP, this being in addition to the compensation they pay you.
      The CRU certificate should show only the benefits paid as a result of the injury in question, so do tell your solicitor the correct position.

      1. Hi Mark, I have received a CRU certificate without k owing the full value of my claim. Which is ongoing, the certificate runs out in March. What does it running out mean and does the CRU certificate mean that you’re going to win? As I’m not sure they have admitted liability yet?.

        1. When a defendant receives a personal injury claim, it must notify the Compensation Recovery Unit of the Department of Work and Pensions.
          The defendant receives a certificate which shows the benefits you have received sinc eyouir injury. If the defendant pays you compensation, it must repay these benefits to the government, in addition to the compensation paid to you. The certificate has an end date, as it predicts the benefits you are likely to receive in the future, so must be renewed to check the figures are correct.
          These certificates are issued in all personal injury cases, so it is not an indication you are to receive compensation. Sorry to disappoint you.
          The governments description of the system can be read here.

  2. Hi Mark,
    Prior to my RTA, I lived on my own in rented accommodation and was in full-time employment. When I left hospital following the RTA, I had to move in with my partner as I could not care for myself and my employer terminated my contract because I could not return to the workplace. I was therefore going to apply for Universal Credit. However, my partner was already on Universal Credit, was in receipt of Housing Benefit (her 21 year old daughter lived in the house too) and she was also a Full-time Carer for her elderly father (her father lived in his own house). We therefore entered a Joint Universal Credit Claim which we were awarded. My question therefore relates to Benefits Compensation being paid back to the DWP by the Defendant’s Insurer some 3 years later after the RTA and it is this; Should the Insurer pay back ALL the Universal Credit Benefits that have been paid to the JOINT Claim ? – for example, the Rent (which is in fact for three Adults) and the Standard Allowance for a COUPLE both over 25? All the Universal Credit Benefits have always been put directly into my Partner’s Bank Account. To slightly complicate matters, we got married one year into this. I would greatly appreciate your consideration to my question, please.
    Thank you, in advance.

    1. The theory of benefit recoupment is the party causing the injury should pay, not the State. In addition to paying your compensation, the defendant must repay to the State certain benefits paid in respect of an accident, injury or disease. The liability to repay is the defendant’s liability. The scheme is managed by the Department for Work and Pensions, which I will call the DWP.
      So you are not compensated twice, the defendant can offset certain benefits against certain parts of your claim. Your question will only be of financial significance to you if teh defendant is seeking to offset, which means reduce, some or all of the benefits form your compensation.
      Th eapproach of the DWP is to say that all Universal Credit should be repaid by the defendant, even though not all of the benefit payment iis due to the accident. If the accident had not happened and you moved in with your partner, would she have needed Universal Credit?
      There is a useful explanation about recoupment of Universal Credit here.
      To understand teh scheme, you can read the DWP technical gudance here.
      before getting too wound up, ask your solicitor if your compensation is actually being reduced by offsetting of benefits. If not, the question is between the defendant and the DWP.

  3. Hi Mark, I was in receipt of PIP Enhanced Mobility before my car accident. Most of my journeys were local eg shops, bank, etc and had help to get there. After the accident my mobility needs increased getting to consultations at the hospital and physiotherapy. I have two questions and would appreciate your thoughts; 1) can I claim for the extra time on behalf of the person who helped me to get to my appointments and for waiting with me? 2) will DWP want to recoup my Mobility payments from my compensation, even though the accident happened while I was already in receipt of PIP?
    Thanks for clarifying.

    1. If you were taken to medical treatment appointments, you can claim travelling expenses for the person who took you. You may also be able to claim for their time. This is called a claim for gratuitous care, which yuou should raise with your solicitor.
      The benefit you identify is not recoupable by the government, but sometimes you have to give credit for some benefits against some parts of your claim. If the benefit is not relevant to the accidnet, it should play no part in the calculation. Make sure your solicitor knows this benefit pre-dates the accidnet.

  4. Hi. I had an accident at work in May 2016 and was paid PIP from January 2017 and still receiving payment. The consultant has declared that I should only be compensated for two years from the date of the accident as this is the time he would expect me to have recovered.
    The DWP want to reclaim all monies paid from Jan 2017 to April 2020. 5 Years.

    Why is the period of recovery not restricted to 2 years, the same period as the compensation.

    1. The DWP can recoup benefits linked to an accident for a maximum of 5 years.
      You do not repay those benefits, but you do have to give credit in your financial loss claim for certain benefits against certain parts of your claim.
      It is the defendant which repays the benefits to the DWP, so it is in their interests to reduce the repayment. Ask your solicitors to encourage the defendant to take up the point with the DWP now, rather than at the end of the case, as it will make settlement easier.

  5. Thanks for your reply sorry
    I’m a little confused I was told that because I had the accident in the April of 2013(because i kept on working)but didn’t make a claim for any benefits until August 2018 and my case for compensation is still ongoing that because it had been longer than 5years from when the accident happened until I made a claim for benefits that it wouldn’t affect my claim?

    1. Benefits received in the five years after the accident are subject to recoupment. You have claimed no benefits in that five year period, so there is nothing for the insurance company to repay.

  6. Hi I’ve received a letter from the cru about recovering money but I don’t understand it. When I had the accident I was out of work and had a joint claim of universal credit at the the time and I didn’t receive any sick benefits while off work so not sure what there is to recover? I never received any loss of earnings in my payout either

    1. Don’t worry. It is the party which paid the compensation which is liable to repay any recoupable benefits to the government, not you. You are sent the letter for information purposes only.

  7. After further research I’m I right, I had an accident in
    April 2013 but didn’t make any claim for social security benefits until August 2018 am I right in presuming that because there was a 5year gap that I won’t have to pay anything back from my compensation?

    1. The benefits to be repaid end at the settlement of the action, or five years if that is later. Recoupment is not avoided if a compensation action runs beyond five years.
      You do not have to pay your benefits back. It is the party paying the compensation to you which is liable to pay back the benefits. Within the calculation of your financial loss, you must give credit for certain benefits only against certain parts of your case.
      Think about it this way. You were earning £200 net each week, were unable to work so claimed benefits of £100 per week Employment and Support Allowance. Your financial loss is actually £100 per week, You have given credit for the £100 per week benefits within the calculation of your claim. the insurance company paying compensation to you must, in addition, pay that 3100 per week back to the government.

  8. Sorry but I don’t quite understand, put it this way say for instance I was awarded 40k would the dwp want to recoup some of the benefits I’d received?

    1. Recoupment is an arrangement between the government and the party paying the compensation, usually an insurance company.
      The party paying compensation is responsible to repay benefits to the government. That liability is in addition to paying compensation to you.
      You do not pay anything to the government.
      In the calculation of your financial losses, you will deduct certain benefits received against certain parts of the compensation. For example, if benefit is paid for care, you would only deduct that benefit against a compensation claim in respect of care.

  9. Hi I’m currently in the middle of a long drawn out compensation claim which is still ongoing, I’m currently still out of work due to the accident I suffered. The insurance company have been making intrem payments basically covering some loss of my also in receiving pip and ESA, industrial injuries disablement benefit when the claim is finally settled will I have to repay any benefits I’ve received?

    1. The liability to repay benefits paid following your injury rests with the party paying the compensation. That repayment is made in addition to paying compensation to you.
      Within the calculation of your financial losses, you may have to give credit for certain benefits against certain elements of your claim.
      Study the text above to check what benefits might be deducted from your financial losses.

  10. hi,
    I had recently a motorbike accident and have injured a soft tissue in my lower back. been at the hospital but found out I were pregnant same time. I have refused x-ray due the risk of harming unborn baby after having 5 miscarriages . I haven’t claim any benefit after accident as didn’t know how and where and if I have to of if it my solicitor who does that. my back is still very sore and nights sleepless. I have a night seating job which I just started 2 days before accident and were scared to lose it. my mobility is still limited during the back ache and no treatment can be carry due the early stages of pregnancy. I’m still awaiting rehabilitation. the baby seems to be fine what we found out on early pregnancy scans, I have also an appointment to see specialist after accident that my solicitor has send me to. today I have received a certificate from DWP about CRU that I believe my solicitor has applied for. it doesn’t say any sum on it . the only think is say is : the amount due is NIL. No recoverable benefit(s)/lump sum(s) have been paid. what does that mean and do I still going to receive my compensation?
    thank you for ant help

    1. Hi Monika, Do not worry, the Nil Certificate from the Compensation Recoupment Unit has nothing to do with your right to recover compensation for your injury. It simply means you have not claimed certain benefits, which the insurer of the person responsible for your accident must repay to the government when settling your case.
      I do not expect your solicitor will claim benefits for you, so this is something you must do yourself. There is a very useful website at where you can check which benefits you can claim.

  11. Hi
    My claim has just been valued at 12000 to 16000. It is being put to the other party on Monday I belive.
    I was claiming esa before the accident but I have made a claim for pip since which I am now in receipt of. I haven’t received this as a direct influence of the accident although it has played a small role on one or the descriptors.
    I am unsure what will happen in regards to my compensation now.
    Also with the compensation I was planning on taking my family on a holiday, could I do this via a trust fund? Could I pay money to a relative via cheque from the trust fund
    Thanks in advance

    1. The first question relates to recoupment of benefits. The party paying compensation, usually the defendant’s insurer, is liable to repay to the government all benefits you received as a result of the accident. That is a separate liability and the insurer can squabble about the amount with the recoupment unit of the DWP.
      Within the calculation of your compensation claim, you only have to deduct certain benefits against certain elements of your claim. The page above lists the benefits and the elements of your claim.
      If personal injury compensation is held in trust, the trustees will be able to make payments which are to your benefit, so a holiday is fine. Please be aware that not every trust is the same, so the actual powers of trustees do depend on the powers they are given in the trust document.

    1. The party liable to repay benefits is not you, it is the compensator – that is the person or organisation which is paying you compensation.
      The party paying compensation may deduct certain benefits from certain parts of your compensation.
      You ask about DLA, disability living allowance, so I will explain that. The compensator will deduct the care component of your DLA from the part of your case which claims for the cost of care. The mobility element of DLA will be deducted from that part of your compensation which deals with your loss of mobility. So, if you receive DLA, care and mobility components, but do not seek compensation for the cost of care or loss of mobility, there should be no deduction from your compensation.
      There is a detailed explanation on the Government website at point 4.2
      Youu can make sense of this by treating benefits as a payment on account of compensation. In simple terms, if you lost £100 per week in earnings, but received £40 per week in benefits, your loss is actually £60 per week. You give credit for the £40 benefits and claim £60 per week and the insurance company which is paying compensation pays £40 per week back to the government. You recover your actual loss and the government gets its benefit payment back, as why should the government pay for a loss which is the fault of someone else?

  12. I had an accident at work in July 2010 and my injury claim went on till November 2013 where I won my case I won £28,000 but the government took £13,000 back off me because I was on the sick receiving sick benefits is it right they can take so much and have I left it to late to find out

    1. I presume your question relates to what are called the recoupment regulations.

      If you receive benefits as a result of an accident the insurer which pays you compensation must repay those benefits to the Government through the Department of Work and Pensions.

      Quite separately you must give credit for certain benefits you have received if those benefits coincide with certain parts of your compensation. A simple example is that if you received the mobility element of disability allowance you only have to give credit for that benefit against claimed loses in respect of mobility. The same would go for the care element of disability allowance as you would only give credit against the cost of care which you claimed in the compensation.

      Your solicitor should have explained this to you when advising on the settlement of your case.

      The Government website is helpful if you read section 8.

      I think the best way to put your mind at rest is to ask your solicitor to explain for which benefits you gave credit and against which parts of your claim. The most likely explanation is that wage loss made up the greater part of your claim and you had to give credit for income support or ESA.

      I hope that helps point you in the right direction.

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