Personal Injury Payment Coming - Effects on Benefits????

[Googley2]

My husband is due a payment over the 6,000 level for a personal injury claim. We are in receipt of housing benefit and working tax credits as he is self-employed. Now the solicitors have told us that the money HAS to go into a Personal Injury Trust run by another company who want to charge us 500 fee to set-it up and maintain it. Apparently we can use the money for a large purchase (ie new car) but not to pay our debts, mortgage or buy food.

 

Now I am wondering if anyone can help me clarify the following:

 

- Will it affect our WTC and HB?

- Can we set up a trust ourselves somehow and avoid the 500 fee?

- If we buy a car immediatley and money is all used up what the point of all this and a waste of 500?

- Is there any way to pay debts, mortgage, etc which is what we really need to survive?

 

Afraid I have no previous experience of this so would really appreciate any help/advise possible.

 

Thanks

[sj01]

Hi, this money does not have to go into a trust. They cant make you do any thing with it, its your choice.

The trusts are expensive to set up and they charge an annual fee too and are probably run by your solicitors office.

The DWP and council tax people have to give you a year from when you recieve the money before they take it into account.

Write to the dwp and council telling them about the money and that you believe you have a year before they take it into account.

Make sure you recieve and keep a reply to your letters.

My council were unaware of this rule so they took a while to reply to me but I was correct.

If after a year you want to put it into trust then you can or you may have less that £6,000 by then.

I would only consider this trust if it was a lot of money but take your time to find the best company.

[Nystagmite]

WTC is based on the taxable interest of savings and not the actual capital.

[nicolee2931]

You can pay your debts from a personal injury trust this is no problem at all, however what you can't use it for is your day to day living expenses such as mortgage and food.

 

However saying that funds can be transferred from the trust fund, which you can use for expenses. However bearing in mind you aren't allowed to hold more that £6000 in capital in your bank accounts.

 

My hubby got awarded £148,000 from a car accident and that went into a trust fund, from which we hold no more than £5000 in our accounts. So there is ways and means of using the money for purposes to suit you.

 

However don't fall into the 12 months trap where you have 12 months to decide what to do in setting up a trust, as it has been the case in the past that it can be argued you purposely deprived yourself of capital unjustly, I know they are not allowed to do this but it won't stop the DWP trying it on.

 

As for management fees, it depends who sets it up. Some companies charge a yearly management fee, others just charge a larger setup fee but put the money into a bank who has experience managing such trusts for free, ours is held by the Natwest and we pay no yearly fee.

 

But it depends on your own circumstances really and really how much over £6000 you have, the greater the amount over the limit the more of a fight the authorities will put up.

[Nystagmite]

However bearing in mind you aren't allowed to hold more that £6000 in capital in your bank accounts.

 

You are; but some benefits (not tax credits) may be reduced.