Skip to content

Compensation Recovery

If you have had an injury or a disease and someone else is to blame, you may claim compensation. If you are getting a social security benefit it may affect your compensation. The following information tells you which benefits affect compensation and how it is affected.

Compensation and social security benefits

When someone claims compensation, the person or company they are claiming from (the compensator) must tell the Compensation Recovery Scheme. The compensator is the person or organisation likely to be paying the compensation.

If you have:

  • claimed or received compensation
  • received a social security benefit because of your accident, injury or disease

The compensator has to pay back the amount of social security benefit you have received as a result of your accident, injury or disease to the Department for Social Development. The amount the compensator has to pay equals the total benefit you are paid from the day after the accident or injury to the date of the final compensation payment or for up to five years – whichever is earlier. If you have claimed benefit because of a disease, the amount the compensator has to pay is worked out from the day you first claimed a benefit because of the disease.

Reducing your compensation payment

Your compensation award may consist of four separate elements:

  • loss of earnings
  • cost of care
  • loss of mobility
  • pain and suffering

If you are awarded compensation under the first three elements, the compensator may reduce your compensation if you have had benefit to meet the same need. The benefits that might affect your compensation are:

  • Disability Working Allowance
  • Incapacity Benefit
  • Income Support
  • Industrial Injuries Disablement Benefit
  • Invalidity Pension
  • Invalidity Allowance
  • Jobseeker’s Allowance
  • Reduced Earnings Allowance
  • Severe Disablement Allowance
  • Sickness Benefit
  • Unemployability Supplement

An example would be if you were awarded compensation for loss of earnings and you were also paid Jobseeker’s Allowance as a result of the incident.

The compensator can reduce the loss of earnings element of your compensation by the amount of Jobseeker’s Allowance you were paid.

If the compensator reduces your compensation payment in this way you must be sent a breakdown of the calculation. Compensation for pain and suffering cannot be reduced in any circumstances.

Effect of compensation on Retirement Pension

Retirement Pension does not have to be paid back from compensation but if you get any of the benefits shown above after retirement age, they may have to be paid back.

Effect of compensation on War Pensions

If you get a pension from the Service Personnel and Veterans Agency, this may go down because of your compensation.

Check the facts when you are awarded compensation

The Compensation Recovery Scheme sends a certificate of recoverable benefit to the compensator and a copy of the certificate to you or your representative. The certificate shows how much benefit, if any, the compensator has to pay back to the Department for Social Development. If you do not agree with the information on the certificate, you have the right to ask for a review. There is information on the certificate that tells you what to do.

If you do not agree with a decision to reduce your compensation, you may be able to appeal. You can only do this after the compensator has reduced your compensation to repay benefit to the Department for Social Development. You must appeal within one month of the date that the compensator makes the final payment of benefits to the Compensation Recovery Scheme.

If you are receiving benefit

You must tell the office that pays your benefit as soon as you get your compensation if you receive:

  • Employment and Support Allowance
  • Income Support
  • Working Tax Credit
  • Jobseeker’s Allowance
  • Housing Benefit
  • Rates Relief
  • Pension Credit

If you get a pension from the Service Personnel and Veterans Agency, please make sure you let them know.

Where to get help and advice

If you need further advice or information please contact the Compensation Recovery Scheme.

More useful links