The Social Security (Recovery of Benefits) (Lump Sum Payments) Regulations 2008

Reduction of compensation payment E+W+S

12.—(1) This regulation applies in a case where, in relation to any compensation payment in consequence of a disease made to, or in respect of P, a lump sum payment has been, or is likely to be made to, or in respect of P.

(2) In such a case, any claim of a person to receive the compensation payment is to be treated for all purposes as discharged if—

(a) that person is paid the amount (if any) of the compensation payment calculated in accordance with this regulation; and

(b) if the amount of the compensation payment so calculated is nil, that person is given a statement saying so by the compensator who (apart from this regulation) would have paid the gross amount of the compensation payment.

(3) For an award of compensation for which paragraph (1) is satisfied, so much of the gross amount of the compensation payment as is equal to the amount of the lump sum payment is to be reduced (to nil, if necessary) by deducting the amount of the recoverable lump sum payment.

(4) Paragraph (3) is to have effect as if a requirement to reduce a payment by deducting an amount which exceeds that payment were a requirement to reduce that payment to nil.

(5) The amount of the compensation payment calculated in accordance with this regulation is—

(a) the gross amount of the compensation payment;

less

(b) the reductions made under paragraph (3),

(and, accordingly, the amount may be nil).

(6) The reduction specified in paragraph (3) is to be attributed to the heads of compensation in the following order—

(a) damages for non-pecuniary loss;

(b) damages for pecuniary loss,

and, the reduction is to be made before any reduction in respect of recoverable benefits under section 8 of the Act.

(7) Where the lump sum payment has been made to a dependant of P, the reduction specified in paragraph (3) may be attributed—

(a) to any damages awarded to that dependant—

(i) under the Fatal Accidents Act 1976;

(ii) to the extent that they are made in respect of a liability arising by virtue of section 1 of the Damages (Scotland) Act 1976; or

(iii) under the Fatal Accidents (Northern Ireland) Order 1977,

other than those paid for funeral expenses;

(b) to any part of a compensation payment paid in respect of P, where that dependant is an intended beneficiary of part or all of that compensation.