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What is the Compensation Recovery Unit?

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Posted by Rachael Flanagan on 31 May 2016

Rachael Flanagan Associate

What is the compensation recovery unit, and why is it notified of my claim?

The compensation recovery unit (CRU) is part of the Department for Work and Pensions (DWP). If you are injured either through accident or disease and make a successful claim for compensation, the CRU must be notified of the details of your claim by the organisation (or person) paying the compensation (the compensator). The CRU records all welfare benefits you receive as a result of your injuries.

If you are awarded compensation, then the compensator is liable to repay the DWP for any injury-related benefits you receive. Before making an award, the compensator will apply for a certificate from CRU, which will detail all the benefits paid as a result of your injury.

What happens if I receive benefits following an accident or disease claim, and why will this affect my compensation?

If you receive compensation as a result of an accident (personal injury or clinical negligence) or disease claim and you have received state benefits, these benefits may be deducted from the compensation you receive. The legislation governing this is the Social Security (Recovery of Benefits) Act 1997.

The reason why deductions can be made under the Act is, in effect, so that you are not compensated twice for the same injury, i.e. the claim will put you back in the position you would have been in had accident or disease not occurred.

However, general damages and special damages are treated differently. General damages (the amount paid for the pain suffering and loss of amenity) are protected, and so no benefits can be deducted from them. By contrast, benefits can be deducted from special damages (i.e. financial losses including lost earnings, travel expenses for attending hospital, medical expenses and prescriptions) but only from past financial losses. This means that if you are no longer able to work as a result of your accident or illness, or you will incur future care costs, benefits cannot be deducted from this future element of your claim.

What deductions will be made, and how do the deductions work?

When deducting benefits from your compensation claim only those benefits that are 'like for like' can be deducted. The CRU sends a certificate of recoverable benefit to both the compensator and you (although this normally goes directly to your solicitor or other representatives). The certificate details the amount you have claimed in benefits, which type of benefit has been claimed and, ultimately, the amount paid to the DWP by the compensator from your compensation. If the compensation amount is less than the amount listed as a benefit to be recovered, the compensator is liable to pay the difference.

The way in which the benefits are deducted are set out as follows:-

Past loss/ compensation Social security deductible benefits
Loss of earnings for 5 years immediately following the accident

Disability Working Allowance

Employment and Support Allowance

Incapacity Benefit

Income Support

Industrial Injuries Disablement Benefit

Invalidity Pension 

Invalidity Allowance

Jobseeker's Allowance

Reduced Earnings Allowance

Severe Disablement Allowance

Sickness Benefit

Statutory Sick Pay (paid before 6 April 1994)

Unemployment Supplement

Unemployment Benefit

Universal Credit
Cost of care up to date of trial/hearing

Attendance Allowance

Disability Living Allowance (care component)

Industrial Injuries Disablement Benefit increase for Constant Attendance Allowance or Exceptionally Severe Disablement Allowance

Personal Independence Payment (living component)
Compensation for loss of mobility up to trial/hearing

Disablement Living Allowance (mobility component)

Mobility Allowance

Personal Independence Payment (mobility component)

What happens if I do not agree with the certificate of benefits?

If you believe the benefits listed on the certificate are wrong, you can ask for the CRU to review the certificate which is known as 'Mandatory Reconsideration'. You must request a mandatory reconsideration within one month of the date the compensator made the final payment of benefit to the CRU. Any evidence supporting the request should be sent at the same time. This might include copies of medical reports and copies of statements and documents about the agreed settlement. The CRU will review all the evidence and decide if the certificate should be changed (where a partial refund is issued), revoked (where a full refund is issued) or confirmed as correct. A written explanation of the decision will then be sent to you.

If you still do not agree with the mandatory reconsideration notice, you can appeal, but this must be done within one month after the date the mandatory reconsideration response was sent. If the appeal is not made within the specified times, and there was no good reason why it was late, it may not be allowed. 

About the author

Rachael is an associate who specialises in personal injury and medical negligence claims.

Rachael Flanagan

Rachael is an associate who specialises in personal injury and medical negligence claims.

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