Government Recovers Millions from Compensation Claims

Government Recovers Millions from Compensation Claims

The Government has recovered £123m from compensation claims made by those on benefits.

For the financial year 2017/18, the total amount recovered from compensation claims made by those in receipt of state benefits, including injury at work claims, saw a record high in respect of clinical negligence, according to statistics released by the Department for Work and Pensions’ Compensation Recovery Unit.

The unit was established during the Conservative-Liberal Democrat coalition government with the aim of ensuring that benefit claims and payments were funded by the compensation received that directly caused the claim for benefits in the first place.

Since its inception in the 2010/11 financial year, the Compensation Recovery Unit has recovered a staggering £1.05 Billion from compensation awards to those claiming state benefits.

Perhaps the more worrying statistic for the Government in the recent information release is that of the continued year-on-year rise in claims for Clinical Negligence, which has been on the up since the 2013/14 financial year.

Although the financial numbers of the recoveries from benefit claims are staggering, it is interesting to note that total settlements from the Compensation Recovery Unit have reduced by over 100,000 in 2017/18 from just over 1 million settlements in the 2016/17 period.

The Law Behind the Numbers

The Social Security (Recovery of Benefits) Act 1997 was established to create a status quo, effectively balancing the fact that a person who is claiming benefits as a result of a calamity resulting in a compensation claim, is in the same position financially as if they were still working having not had to make a compensation claim. The basic logic is there would be no claim for benefits without the compensation claim and vice-versa, thus DWP determines through the Act that it should be compensated from the initial compensation claim.