Recovery of social security benefits

The following PI & Clinical Negligence practice note provides comprehensive and up to date legal information covering:

  • Recovery of social security benefits
  • The recovery system
  • Like-for-like offsetting
  • What can be offset?
  • Protected heads of loss
  • Relevant period
  • Exempt payments
  • The impact of Universal Credit
  • Contributory negligence
  • Multiple compensators
  • More...

Recovery of social security benefits

The recovery system

A claimant will often receive state benefits as a result of an accident, injury or disease. The Department for Work and Pensions (DWP) operates a system for recovering these benefits from the compensator (either the defendant or, in most cases, the defendant’s insurer) via the Compensation Recovery Unit (CRU).

A compensator who makes a compensation payment in any case is liable to pay an amount equal to the total amount of the recoverable benefits.

The compensator is in turn entitled to recoup certain benefits against three types of loss:

  1. loss of earnings

  2. cost of care

  3. loss of mobility

The purpose behind the scheme is to ensure that an injured claimant is not compensated twice. The compensator, as the party liable for the claimant's injuries, refunds the cost of any benefits paid out to the claimant to the CRU.

For guidance on how to apply for a CRU certificate and on challenging a certificate, see Practice Note: CRU certificates—recoverable benefits and lump sum payments.

Like-for-like offsetting

The compensator is only entitled to offset recoverable benefits on a like-for-like basis as against the three types of loss. The scheme ensures that only certain special damages can be offset and that the injured party’s claim for general damages is always protected. The table below sets out which benefits can be offset against each of the three permitted

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