If someone suffers an injury or medical negligence, and is successful in claiming compensation, it may be a good idea to set up a Personal Injury Trust. These may exist instead or alongside a deputyship.
Keeping compensation in a personal injury trust means the compensation amount is disregarded from means testing. It allows for an individual to receive the compensation they deserve and the benefits they need ongoing, such as income support, housing benefit, jobseeker’s allowance or employment allowance.
There is a “one-year disregard”, where for the first 52 weeks after the claim has settled, the compensation amount isn’t considered during means testing. It’s best to set up a Personal Injury Trust during this 52-week period.
Keeping the compensation in a trust also allows for careful planning away from other finances. If the individual lacks capacity now due to their accident or negligence, the trustees would be able to make sure the compensation covers all the things it needs to, such as further medical treatment or rehabilitation.
There are also trusts you can set up for children if they are awarded compensation for personal injury or clinical negligence claims. The trusts can be accessed by a parent, guardian or solicitor, and can continue after the child turns 18 if the family wishes. The compensation in the trust can be used for medical treatment and for maintenance of a child’s ongoing needs.