Planning on making a personal injury claim? Or perhaps you’re awaiting compensation? Either way, you might be wondering how your settlement will affect your PIP – and you’re not alone. One of the most asked questions is: do you have to pay PIP back after settlement? UK law states that the short answer is no.

The long answer is a lot more complicated, particularly if you’re also claiming means-tested benefits like Universal Credit or Housing Benefit. In this guide, we’ll dig into the specifics of PIP and compensation claims, as well as give you tips on protecting your benefit entitlement.

Will a settlement change my PIP payments?

Personal Independence Payment (PIP) is not a means-tested benefit, so it isn’t affected by your income, savings or overall finances. That means a settlement suddenly changing your financial standing shouldn’t affect your PIP.

PIP rules revolve around how your disability or health condition affects your day to day life, so any new money you receive, settlement or not, will not affect this.

Do I have to pay PIP back after a personal injury claim?

You do not have to pay PIP back after receiving a personal injury settlement. This is true whether your claim is settled in or out of court, and no matter the size of your payout. There is no requirement to reimburse the Department for Work and Pensions (DWP) for PIP.

Some people confuse PIP rules with other benefits that are repayable upon personal injury settlements, mainly non-means-tested benefits in the UK.

Does the DWP check compensation payments?

In some cases, the DWP will get involved in personal injury compensation claims, but not in relation to PIP. They have a special department called the Compensation Recovery Unit (CRU) that is dedicated to recovering benefits if someone with means-tested benefits has received a large settlement. These include:

When it comes to personal injury settlement and benefits, UK law states that your solicitor must notify the DWP of your winnings. The CRU will then assess whether or not you are receiving any means-tested benefits, and if you are, they will recover the funds.

Once again, your PIP payments will not be affected by the DWP and personal injury claims rules around settlements. PIP is completely separate from other benefits and is treated as such.

What if I claim other benefits as well as PIP?

While PIP is not affected by compensation, if you’re also receiving means-tested benefits, your settlement may have an impact. That’s because many of these benefits have a savings threshold, after which payments can be reduced or stopped.

  • Universal Credit has the lowest savings threshold of means-tested benefits at £6,000
  • Housing Benefit has a savings threshold of means-tested benefits at £16,000

If you do claim one of the above, there are ways of protecting benefits after settlement, the most popular being a Personal Injury Trust.

What is a Personal Injury Trust?

A Personal Injury Trust is a legal arrangement that allows you to separate your settlement from your regular savings. It works by holding your compensation funds separately from your other income, allowing you to protect it for future care needs. As a bonus, separating your funds like this will ensure your means-tested benefits are not affected as your personal financial standing has not changed.

Should I speak to a solicitor before accepting a settlement?

If you want more advice about PIP or you are receiving more than one type of government support, you might benefit from getting in touch with a personal injury solicitor.

Our experts at Express Solicitors can help you to:

  • Understand how your settlement will affect your financial standing
  • Set up a Personal Injury Trust, if needs be
  • Make sure the settlement is right for your personal injury and future needs
  • Protect your settlement in the long-term

What happens next?

If you’re unsure whether or not to pursue a personal injury claim and are thinking “Do I have to pay PIP back after settlement?” we can help.

For peace of mind on the details and helpful guidance throughout your case, get in touch with Express Solicitors. Our team is here to help you navigate the process with confidence, from start to settlement.