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| Personal Injury Trusts |
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If you are in receipt of means tested benefits or could be in the future then you should consider setting up a
Personal Injury (PI) Trust. The purpose of a PI Trust is to ensure that claimants seeking compensation retain their
right to means-tested benefits. The following are means tested benefits:
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Income Support |
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Housing Benefit |
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Council Tax Benefit |
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Working Families Tax Credit |
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Disabled Person’s Tax Credit |
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Income Based Jobseeker’s Allowance |
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As a general rule, if you have over £6,000 at your disposal you are at risk of having your benefits reduced.
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If you have over £16,000 then you are at risk of losing them entirely. If your compensation is paid directly
to you then you will be classed as having this money at your disposal.
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Therefore, if you are going to be receiving more than £10,000 you should give serious thought to setting up a trust fund.
If you are expecting to receive less than £10,000 you should still discuss the possibility as it may still be cost effective
to set up the trust in any event.
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Finally, if you think you may need to go into residential care at some point in the future, the setting up of
a PI Trust will protect your compensation from being taken away by the Local Authority in order to pay for your care.
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| Frequently Asked Questions |
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| When should a Personal Injury Trust be set up? |
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A PI Trust is best set up at the point of settlement or at the interim payment stage.
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| Who can be a Trustee? |
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It is recommended that there should be at least two. Usually one of these people would be the claimant,
the other person can be anyone over 18 years old, a professional such as a solicitor or a member of the claimant’s family.
The trustees are chosen by the claimant who retains the right to alter appointments at any time.
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| How easily can I get hold of my money? |
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The money is to be used for your benefit. You can easily obtain the money – provided all of the trustees sign the cash
withdrawal form or cheque. (See next for some rules about how you should spend your money.)
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| What can I spend my money on? |
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Until recently there were restrictions on what you could and couldn’t spend the money on.
The Trustees could pay someone for services or benefits provided for the claimant.
Typical examples would include care costs, house purchase, holidays, a car, but not house running costs.
This has now changed. You can spend the money on anything you like.
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| Do I need to inform the Benefits Agency of the existence of the Trust? |
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Yes. The solicitor acting on you behalf can do this, all they require is your
National Insurance number and the address of your local Benefits Agency.
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| What do I do next? |
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We can recommend that you speak to the solicitor acting on your behalf and see an Independent Financial Adviser (IFA)
to see how to make your money work best for you. We can recommend an IFA to you. Please note that we do not have any
formal relationship with any IFA and we will not receive any payment for the introduction.
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