Hi

I have a client who has in the last week been awarded a compensation payment of around £17.5k by the NHS. This has been paid to him by cheque.

As far as I can see, such a compensation payment would not be disregarded for HB/IS purposes.

Client has tried to open a bank account to pay the cheque into, but was rejected due to inadequate proof of ID. As a result, he does not have 'access' to the money at this stage. We are hoping to assist him in opening another account in the coming weeks.

My query is this - is he treated as being in receipt of the capital from the date the cheque is issued or from the date he manages to cash the cheque?

Thanks

If it's personal injuries compensation it's ignored as capital for 52 weeks, after which any residue would need to be placed in trust for it to be ignored. Or is it compensation for unfair dismissal, or something else?

Thanks for the prompt response!

My understanding is:

Client had a previous problem with his wrist which was related to drug use.

A similar problem developed in his ankle. He approached the hospital - he explained his previous problem and drug issues, but he was turned away for treatment. Subsequently the problem became worse and he lost use of the ankle.

Therefore, not an employment compensation issue. Is this classed as a type of PI compensation and therefore disregarded for HB purposes?

Just a note of caution. The 52 week rule only applies to the first payment of any PI compensation. So, if any interim payment has already been made, any later payments (whether interim or final) cannot be disregarded.

On the issue of the cheque, the effective date of capital is NORMALLY when the cheque is received; not presented. But, the issue about not being able to open a bank account may be a factor to take into account. CH/972/2005 may be of interest on the issue of unbanked cheques.

Hope this helps.

Hi Kevin

Thanks for your response. I am informed that this is a one-off payment made by the NHS due to negligence. The client went to A&E with a pain in his ankle, but A&E sent him away without running any tests, saying it was just a sprain. This developed into septic arthritis.

I was wondering whether this type of compensation would fall into the category of personal injury compensation, and therefore disregarded?

Also, do you have an web link to CH/972/2005? Can't seem to find it in the toolkit.

Thanks again.

thanks to kevin .. here's the CD ...

http://www.rightsnet.org.uk/pdfs/CH_0972_2005.doc

Thanks Shawn.

Sorry if I'm being dim here, but does anyone know....would such compensation for medical negligence be counted as personal injury compensation and therefore disregarded for HB purposes?

Thanks again.

I'm not a lawyer, but based on personal experience of taking legal action, my initial instinct is that it is not compensation for personal injury. It's more like compensation for failing to deal with such an injury. But, someone with appropriate legal knowledge may have a different view.

There is apparently an old SB case that says that personal injury includes disease and the consequences of such disease, direct or indirect, such as the need for amputation of a limb following septicaemia after undiagnosed meningitis. I can't see how that would be likely to occur except in a medical negligence case. It also says it applies in criminal injury cases (E(SB) 2/89), so your criminal injuries compensation is safe too.

In the dim and distant past I briefly did quite a lot of PI with the odd medical negligence case, and the same lawyers, as well as principles of calculating damages, would be involved in both sets of cases. Your client has suffered injury due to a negligent action, just as much as if that negligent action was running him over.

Thanks very much for the advice - I shall contact the LA to advise of the payment and that they should disregard it for 52 weeks.

I think a discretionary trust might be worth investigating, to hold the money if the NHS will pay to a trust rather than an individual.