CICA Compensation and UC

Hi

Client is currently the appointee of her daughter’s benefit is thinking about whether she needs to claim UC - currently only claiming PIP.

Client’s daughter received a CICA payment for approx £8000 and she has a couple of questions regarding this and UC:

1. If left as it is, would this be counted as capital or is it disregarded as some personal injury payments are?

2. She looking at putting this in a “trust fund” for her to access either at a later date or have it paid as and when she needs it? If she put this in a trust fund before claiming UC, is that counted as depriving income?

3. If the “trust fund” is paid to her monthly or “when required”, is that counted as regular income and then deducted from her UC?

Any help much appreciated.

Thanks

Payments made under the Criminal Injuries Compensation Scheme are “personal injury payments” under reg 75 (1) and (4) and (5) of the UC Regs 2013 if:

held in trust
administered by a court etc
It appears that the capital is not going to be held in trust so will be counted as capital unless a discretionary trust fund is created.  Any capital or income from the trust fund is ignored as it is discretionary. 
Deprivation may be an issue.  If the client has asked the question about timing of and deprivation and a UC cliam then, prima facie, it would appear that the purpose is to secure UC or increase the amount of UC.

I don’t think that is quite right.  reg. 75 (4) provides,

(4) If the sum is held in trust, any capital of the trust derived from that sum is to be disregarded in the calculation of the person’s capital and any income from the trust is to be disregarded in the calculation of the person’s unearned income.

(my emphasis)

That same wording in relation to legacy benefits has been held to mean that if the source of the capital sum was originally compensation for personal injury, then it is disregarded once placed in trust - and that is the case even where there has been an intervening period (perhaps of several years) where the funds were not held in trust and so counted as capital. In those specific circumstances - because the regs. make express provision for them - deliberate deprivation doesn’t arise.