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ⓘ General information only. This site does not provide legal advice. Always consult a qualified solicitor.
Work Accident Solicitor
Answer · Last reviewed July 2026

Will receiving compensation for a work accident affect my state benefits?

Which benefits are means-tested?

Universal Credit; Housing Benefit; Council Tax Reduction; Pension Credit; Income Support; income-based JSA/ESA; non-means-tested benefits like PIP, DLA, ESA (contribution-based) are not affected by savings

What is the savings threshold for means-tested benefits?

UC: capital above £16,000 disqualifies; capital £6,000–£16,000 treated as yielding £1/week income per £250; rules vary by benefit

What is a Personal Injury Trust?

Trust set up to hold compensation; capital in trust disregarded for means-testing; must be genuine trust (bare trust most common); must be set up before or promptly after receiving compensation; ILR — DWP disregard applies indefinitely if trust properly constituted

What is the Compensation Recovery Unit?

DWP agency — recovers certain state benefits (SSP, ESA, PIP etc.) from compensation payments; defendant deducts and pays direct to CRU; does not reduce general damages — only special damages for the same period

Related questions

Will my Universal Credit stop if I receive compensation?

If compensation takes your savings above £16,000, UC stops. A Personal Injury Trust can protect the compensation from this means test.

What is the Compensation Recovery Unit and will they take my money?

The CRU recovers state benefits paid during the period covered by your compensation. It is the defendant who pays the CRU — they deduct it from your special damages. Your general damages (pain and suffering) are not affected.

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Where did the accident happen?

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Sources

  1. Social Security (Recovery of Benefits) Act 1997
  2. UC Regulations 2013 reg 75
  3. Personal Injury Trusts — DWP guidance

This answer is editorial information about UK law. It is not legal advice and does not create a solicitor–client relationship. For advice on your circumstances, speak to a regulated personal-injury solicitor.