Insult to injury: how the criminal injuries compensation system is failing victims of crime
Criminal injuries compensation and benefits
At present, a compensation award is treated as capital. This can have serious consequences for victims who receive means-tested benefits, such as Income Support. Under current rules, a victim's state benefits may be reduced if they receive an award of more than £3,000. However, the benefits will be stopped altogether, if the award is over £8,000.
This is grossly unfair and discriminatory, because it affects people with the greatest financial need.
Victim Support does not accept the argument that somebody should be denied financial support from the state if they are also awarded criminal injuries compensation. Social security benefits and criminal injuries compensation serve different purposes. Benefits are intended to help cover the cost of living; and compensation is paid to ease the burdens after a crime, and to help reduce pain and suffering.
In negotiations with the Department of Work and Pensions, Victim Support has been told "whilst the government does have considerable sympathy for people who have suffered as a result of crime…it believes that it would be inappropriate to have different rules for the treatment of capital according to the circumstances in which it has been received".6 To treat all cases in the same way, the Government argues, is to "ensure equity of treatment in all cases".
Victim Support believes that the benefits system should make distinctions between the different ways in which somebody accrues capital. It is inappropriate to treat a criminal injuries compensation award in the same way as, for example, a gambling win.
To get round this problem, the Government recommends that victims should put their compensation awards in trust, because money held in trust is disregarded for the purposes of assessing eligibility for benefits. However, only those who have received the largest payouts can afford to set up and administer a trust. This method also restricts how, and when, the money can be used. This prevents victims from regaining control of their lives, which is a vital part of the recovery process after a crime and, admittedly, a process which criminal injuries compensation is meant to assist.
Many crimes have a financial impact on their victims so clearly people on lower incomes feel the impact more keenly than victims with more resources. The annual British Crime Survey, published by the Home Office, shows that a disproportionate number of victims of violent crime are likely to be on low incomes and therefore, more likely to be on benefits.
Yet as a result of Department for Work and Pensions rules it is only the financially self-sufficient (i.e. those not receiving state benefits) who retain a full award. Those on benefits are penalised. This is unfair.
An elderly woman suffered long-term injuries as a result of an assault. Her compensation claim was successful but was counted as capital. This meant that her Council Tax Benefit was affected. As a result the award was valueless.
How the system must change
People should not be left to bear the cost of crime alone. The benefits system, as it currently stands, deprives some people of the support and public recognition to which they should be entitled. An award which acknowledges victims' pain and suffering should be equally available to all victims.
Victim Support believes that criminal injuries compensation should be exempt from social security capital rules. In other words, the award of compensation should be completely disregarded for assessing entitlement to benefits.
6. Letter from department of Work and Pensions, Ministerial Correspondence Unit, 23 January 2019.