Recovery of Benefits by the State from Compensation

The recovery of payments made by the Department of Work and Pensions (DWP) to injured Claimants, is an area of law which can cause a considerable amount of misunderstanding.  Such benefits, which include Industrial Injury Disablement Benefit, are recovered by the DWP through the Compensation Recovery Unit (CRU). Repayment of benefits received occurs when a compensation claim is successful.  The benefits are repaid from the compensation following receipt by the paying party, usually the Insurer and the Claimants Solicitors, of a Certificate from the CRU, which gives details of the sum to be repaid from the compensation.  The person who makes the repayment of the benefit is the person described as the Compensator, almost always the insurance company who are involved in the case.  Therefore, the deduction of benefits is made before a cheque for the balance of the settlement is sent to the Claimant or his/her Solicitors.In the majority of cases, the sum received by the Claimant for the actual injury, which are called General Damages, are ring-fenced so that generally any benefits are only repayable from any other claims made in the action, which are called Special Damages.  An example of these would be loss of earnings.  A claim only has to be successful to some extent to allow full recovery of State Benefits subject to the ring-fencing of the amount recovered for the injury itself.However, the major exception to this ring-fencing is that the rules are different in cases where a lump sum payment has been made to a Claimant under for instance, the 2008 Diffuse Mesothelioma Scheme or the Pneumoconiosis, etc (Workers’ Compensation) Act 1979 and Part 4 of the Child Maintenance and Other Payments Act 2008.  In these specific cases where lump sums have been paid the benefit can be recovered not only from the incidental claims for loss of earnings etc, but also against the General Damages for the injury to the extent necessary. In these cases therefore the General Damages for the injury itself are not ring-fenced. However, if a lump sum payable under the Legislation referred to above exceeds the amount of compensation paid, then recoupment cannot be more than the compensation.The period in respect of which benefits may be recovered by the DWP begins:- on the day following an accident or injury; or in Disease cases, the date that a listed benefit was first claimed in consequence of the disease.The period ends:- on the day a compensation payment is made in final discharge of a claim; the date 5 years after the relevant period begins, whichever comes first.This area of the law can be complicated, but experienced Personal Injury lawyers, like those at Wolferstans will be able to advise the client as to the correct position to avoid misunderstanding and disappointment.For further advice, please contact John Messham, Associate Lawyer on 01752 292209 or

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