Ex gratia and compensation payments

What are ex gratia and compensation payments

You may get an ex gratia payment if you've been harmed in some way. An ex gratia payment means there's no acceptance of blame and no legal requirement to pay you.

Compensation payments are also made because of harm done, or to settle a claim of harm. They are sometimes ordered by a court or tribunal, but can also be made through a settlement outside court.

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When this counts as income or a cash asset

An ex gratia or compensation payment may not count as income and/or an asset if it is paid for a case of harm. It cannot be paid for other things like:

• a loss e.g. involving money, land, an asset or goods and services you've provided
• a personal grievance at work.

Payments that may not count as income or assets are usually made by:

• the Government,
• agencies who provide services on behalf of the Government,
• charities, incorporated societies, and faith-based institutions such as churches.

Some ex gratia and compensation payments may not count as income or assets for the first 12 months after they're paid. Others may not be counted as income or assets permanently. The amount of time a payment is not counted as income or an asset depends on who makes the payment to you and why. It's best to talk to us so we can make sure your payments are right.

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How your payments from us could be affected

You need to tell us about any ex gratia or compensation payment you get. If we decide that a payment does count as income or an asset, it may affect your payments from us if:

• you get Accommodation Supplement, Temporary Additional Support or Special Benefit
• you save or invest the payment and earn interest or other income from it.