collateral benefits

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Benefits received from a third party by the victim of a tortious injury in consequence of the injury, such as insurance money, sick pay, disability pensions, loans, social security benefits, or gifts from a disaster appeal fund. Some collateral benefits are taken into account when assessing the damages to be paid by the person liable for the injury; others, such as insurance money and gifts, are not.

Under the Social Security (Recovery of Benefits) Act 1997, the amount of social security benefits received by the victim for the first five years after injury, or until the making of the compensation payment (whichever is earlier), must be deducted from the total damages awarded by the court and be repaid to the state. Previous legislation did not apply to awards of less than £2,500. Compensation under the Act is treated as having three elements; loss of earnings, cost of care, and loss of mobility. State benefits can only be deducted from the relevant head of damages awarded. No benefits can be deducted from damages awarded for pain and suffering.

Subjects: Law.

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