Recommendation IR2-13: Relationship with Support Schemes and Benefits

I recommend that, with regard to the relationship between compensation, support payments and benefits: a) in assessing compensation under the scheme, no account should be taken of any past payments made under the support schemes or their predecessors; b) the current annual payments under the support schemes should be continued (or merged into the compensation scheme) and guaranteed for life, by legislation or secure government undertaking; c) such continued payments should be taken into account in assessing awards for future financial loss or care provision; d) such deductions as would be made from damages under the Social Security (Recovery of Benefits) Act 1997, but no other, should be made in respect of equivalent awards under the scheme; e) awards of financial loss should be made net of tax, but the awards themselves should not be liable to taxation, and should be regarded for tax purposes as if they were support payments; f) any lump sum award under the scheme should be made exempt from inheritance tax by an equivalent addition to the inheritance tax free allowance of the recipient.