Hello, I have a couple of questions.
I am only a few months into my insolvency, however, I have received word that the MOD are going to offer me a settlement in a war pension case. I first applied for the pension 2.5 years ago but it has taken until now to go through an appeals process etc.
I will begin to receive around £60 per week once the paperwork is settled, but will also receive a lump sum for payments back dated to when I first applied 2.5 years ago. The war pension is given for disabilities received during service, although I have only claimed recently, I have had the disabilities for around 40 years.
My questions are -
Will this be treated as a windfall or compensation?
Will the Trustee take all of the lump sum, as well as the weekly payments?
Hi Dandelion. Welcome to the forum.
That's a tricky question actually. The answer boils down to whether the war pension is classed in the same way as a social security benefit. If it does then your lump sum should be safe, though the extra £60per week you are receiving may just mean that you will end up paying more each month from any other non-benefit income that you are receiving, as the ongoing contribution you make is based on overall affordability.
However, to be honest I am not sure whether a war pension is classified in this way. If it isn't then your lump sum would certainly be at risk of needing to be paid across to your Trustee I'm afraid.
I will try and get an official answer on this point and come back to you.
Update for you - I have had it confirmed by the Accountant in Bankruptcy's office that a War Pension (or War Disablement Pension) is treated in the same manner as social security benefits. Therefore you cannot be asked to make a contribution to from it into a Bankruptcy or a Protected Trust Deed.
It is however taken into account when assessing what you can afford to contribute from any non-benefit income you might receive (eg wages/private pension), so could indirectly mean that you end you having to increase your contribution as a result.
@kevin-mapstone Thank you for these replies Kevin, I really appreciate your help. I do have an income from full time employment and make contributions to the Trustee based on the income. All of the pension is classed as compensation, however, I understand that the weekly payment might increase my contributions.
The lump some will comprise of the payments I would have received if they had settled when I made the initial claim. It could be enough to pay the total of my expected contributions!
I'll let you know what happens, thanks again.