Savings

Hi Michael,
Some compensation awards can be exempt from being classed as savings fir up to 52 weeks.
If the claim involves payment for an injury that might be relevant as to why you claim ESA then you will need to contact the Government Compensation Recovery Unit for an assessment. (Basically if you are paid ESA due an injury, DWP may seek recompense for the ESA payments out of the compensation award.)
There is a £16,000 savings (capital) limit on both ESA and UC, so if you can't claim ESA you won't get UC either. However you can continue to claim either benefit if your savings are under £6000. This would include anything else you have already in the bank or via other investments. From £6000 to £16,000 you are deemed to have a pro rata amount of income which then gets deducted from your benefit.
If you spend the capital, (again subject to any 52week disregards, which I can't answer as I don't know the exact sort of compensation award) DWP may claim 'deprivation of capital' - this is where DWP allege you are deliberately spending capital on non necessary items just to fall within the savings limit. I don't know whether buying a caravan would fall within a necessary item. Perhaps if you can argue that this is required to facilitate family holidays, this could be deemed reasonable and would be allowed by DWP. Things like paying for house or car repairs, even a new(er) car might be allowed. Food clothing could all be classed as essential. Diamond rings, ball gowns and top of the range designer wall lights are not likely to be purchases accepted by DWP as being reasonable or necessary, As such they will assume you still have the value of the goods in your bank, and hence could exceed the savings limit, leading to no award of benefit being payable.

You may need to discuss both the compensation type and proposed caravan purchase with an advisor eg at CAB or similar. You will need to take in full paperwork etc.

It is really important to keep copies of all purchases. So the caravan, any fittings/equipment, or any other substantial purchases, other than usual food or usual bills. If DWP accepts any of these purchases it will require proper receipts etc.

I hope this helps.

LL26

Hi Michael

You pose an interesting question, I would advise you to seek help from a specialist Welfare Rights Organisation as you may be looking at trust laws.

You can find your local Welfare Rights Organisation to help you with advice by clicking on the link below and putting in your post code, it will then come up with a MAP with a list of agencies. advicelocal.uk

Gary

Hi Michael

Unfortunately your question is outside the remit of the forum.

I have zero experience of personal injury trust but as a guess that is something I would be looking at.

You really need to speak to someone who knows about trust laws and benefits.

You may get some pointers from fellow members on the forum.

Gary