I have blogged in the past about how an injured person’s benefit payments need to be repaid from certain parts of their personal injury compensation.
What is only just being understood is how the Governments overhaul of the benefits system, known as Universal Credit (‘UC’), is going to have a potentially significant increase in the level of repayments.
This is going to have wide reaching implications for injured people and compensators (usually insurance companies or large organisations like the NHS).
The Government continues to gradually phase in UC across the United Kingdom. It describes it as a social security payment that is designed to simplify the benefits system and to incentivise paid work. It is replacing and combining six benefits for working-age people who have a low household income: income-based Employment and Support Allowance, income-based Jobseeker’s Allowance, and Income Support; Child Tax Credit and Working Tax Credit; and Housing Benefit.
It is fair to say that UC has attracted a mixed response from benefit claimants and the media alike. What is only recently becoming clear, whether by design or oversight by the Department for Work and Pensions (DWP) is that UC is only capable of being offset against claims for loss of earnings.
Before UC, only Income Support, Employment and Support Allowance and Jobseeker’s Allowance were recoverable and could be offset from loss of earnings claims. Now, under the UC regime, there are three other benefits integrated into the one UC payment. These are Housing Benefit, Working Tax Credit and Child Tax Credit.
When a claim is notified to compensators, the law requires the compensator to register the claim with the Compensation Recovery Unit (‘CRU’). The CRU would check whether the injured person claimed benefits and would send a certificate (known as a Certificate of Recoverable Benefits, or ‘CRB’) to the compensator and the injured person (or their Lawyers) showing the benefits they received, broken down into each separate benefit.
If an injured person makes a successful compensation claim for personal injury, compensators are required to repay the benefits claimed as a result of the accident or injury. The idea is that injured people are not compensated twice, once through the benefits system, and once through personal injury compensation.
Since UC is a single payment, the CRU says it cannot break it down into its constituent parts.
Before UC, the six benefits it replaced (detailed above) were listed separately on the CRB. It was relatively straightforward for compensators to see which benefits had to be repaid as having been claimed as result of the injury or accident. Under the new rules, UC is listed on the CRB as just one payment.
This is causing major problems as any UC claimed after an accident or injury must be repaid by compensators in full. This can cause unfairness for injured people as they may end up with more of their compensation being repaid (and therefore not paid to them) than people who are not yet on UC, and whose benefits are separate and more easily broken down into their constituent parts.
Another unforeseen (or perhaps not unforeseen) consequence is that UC covers whole households, whereas separate benefits were applied to each individual person. Therefore, UC paid to benefit an entire family will wipe out a significant chunk of the injured persons compensation. Repayments do not take into account that the UC applies to more than just the injured person, but every person in their household who claims UC, which seems manifestly unfair.
The CRU appears unrepentant. I have had discussions and correspondence with the CRU who says it is not possible to break down the UC figure, and so UC is repayable in its entirety.
It is not clear whether the differences between the ‘old’ system (to which most benefit claimants still belong) and the new UC system is known to Government, but the effects are dramatic and are increasing. The Covid-
19 pandemic has had dramatic effect on the number of people claiming UC. According to New Statesman, in the two weeks to the 4th April 2020, nearly a million people have applied successfully for Universal Credit. That’s ten times the usual number of claimants in any given fortnight. DWP statistics show that a total of 950,000 people applied in the period between 16 and 31 March. https://www.newstatesman.com/politics/welfare/2020/04/million-people-claim-universal-credit-fortnight-and-there-will-be-more-come
Without fresh guidance, or a revised approach from the CRU injured people and compensators will both be starting to see CRB’s showing much higher sums than under the ‘old’ system.
It is very important that compensators state in any offers of settlement whether their offers are gross of net of CRU repayment, and injured people and their lawyers also need to be aware of this and advise appropriately.
Injured people should be very careful when compensators make gross offers due to the large amount of compensation that will be repayable to the CRU.
Previously, it was possible to appeal against whether a specific benefit was related to an accident or injury. UC is classed as one payment, and the CRU refuses (at the moment) to break it down. Injured people (and their lawyers) need to appreciate that the likelihood of a successful appeal to the CRU is much lower.
Ultimately, the upshot of UC is that much higher than usual repayments are going to be made to CRU, affecting compensators and injured people alike.
Our experts can guide injured people through the maze of CRU. If you have a question, or want us to handle your personal injury claim, contact us on 0121 752 2818 or email firstname.lastname@example.org
By: John Green
Title: Does Universal Credit affect my personal injury claim?
Sourced From: www.tayloremmet.co.uk/blog/wordpress/does-universal-credit-affect-my-personal-injury-claim/
Published Date: Fri, 29 May 2020 13:26:46 +0000
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