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 Communities. 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 Communities.
If you do not agree with the information on the certificate, you, or someone who has the authority to act for you, can:
- ask the Department for Communities to look at the decision again
They can only change the certificate if:
- we have made a mistake in preparing the certificate; or
- we have recovered an amount in excess of the amount due; or
- the amount of benefit/lump sum(s) specified on the Certificate is less than it should be because we were not supplied with the correct information; or
- the Department for Communities is satisfied that one of the grounds for appeal listed in Article 13 of the Social Security (Recovery of Benefits) (Northern Ireland) Order 1997 is met.
Due to the introduction of the Appeals Reform Legislation on 23 May 2016, the Appeals process differs depending on the date your certificate was issued. Please ensure that you download the correct version of the Z1 form.
Guidance on certificates issued prior to 23 May 2016
Guidance on certificates issued on or after 23 May 2016
You can appeal against this decision, but you cannot appeal until we have looked at the decision again. We call this a Mandatory Reconsideration. You will receive a letter explaining what we have done, we call this a Mandatory Reconsideration Notice.
This notice includes the information you need to be able to appeal should you still not agree with the information on the certificate.
A request for a Mandatory Reconsideration must be made in writing.
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.
- Social Security / Jobs & Benefits offices
- HM Revenue & Customs (HMRC)
- Northern Ireland Housing Executive
- Land & Property Services
- Veterans UK(external link)
Where to get help and advice
If you need further advice or information please contact the Compensation Recovery Scheme.
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 Communities. 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.
A full overview of the Compensation Recovery Scheme can be found in Leaflet Z1.