Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what assessment he has made of the potential impact of the 12-month limit on capital disregard applied to Armed Forces Compensation Scheme lump sum payments in Universal Credit on injured veterans and their families with caring responsibilities when a personal injury trust has not been entered into.

Lump sum compensation payments under the Armed Forces Compensation Scheme are treated as personal injury capital and are disregarded for 12 months, reflecting longstanding rules across means-tested benefits and allowing time to protect funds intended to meet long-term needs. Where payments are placed into a trust or annuity, they are disregarded indefinitely, meaning the system already provides a mechanism to protect compensation in the long term.

Carers who provide unpaid care for at least 35 hours per week for a severely disabled person may get a carer element as part of their Universal Credit award. DWP is working with the Ministry of Defence to strengthen guidance and improve awareness, ensuring individuals understand their options to protect compensation at the point of award.