Around 57,000 benefit claimants are set to receive compensation payments from the Department for Work and Pensions (DWP) this year.
The payments, which could reach as much as £5,000 per person, will be made available to thousands of Britons but who is eligible?
The DWP aims to complete most payments by August 2025. The scheme compensates claimants who lost “severe disability premiums” (SDP) during their move to Universal Credit before transitional protections were introduced.
Many affected claimants suffered a monthly income loss of around £180. The compensation scheme follows two High Court rulings between 2018 and 2019.
Do you have a money story you’d like to share? Get in touch by emailing [email protected].
These rulings found the Government failed to ensure benefit payments were not reduced when claimants transitioned to Universal Credit.
In 2020, the DWP attempted to challenge these rulings at the Court of Appeal but was unsuccessful. Law firm Leigh Day, which brought the cases, estimates compensation could exceed £5,000 per person.
In February, Neil Couling, DWP’s senior responsible owner for Universal Credit, confirmed most eligible claimants would receive compensation before the end of 2025.
The department has now released more details about eligibility and payment rates. To be eligible for compensation, claimants must be receiving (or have received) Universal Credit that includes an SDP element or transitional amount.
The Government has updated its compensation guidance
PA
They must also have met one of three conditions before moving to Universal Credit. The first condition is having been entitled to an income-based legacy benefit that included an Enhanced Disability Premium.
Furthermore, the second condition is claimants having been entitled to an income-based legacy benefit that included the Disability Premium.
The third condition is having been entitled to an income-based legacy benefit with the Disabled Child Premium, or Child Tax Credit with the Disabled Child Element (non-severely disabled category).
When eligible claimants will receive payment depends on when they moved to Universal Credit and whether they still claim it today.
Couling outlined three distinct groups with different payment timelines. The first group includes those due additional transitional SDP element from 2020 onwards who still receive Universal Credit.
The second group comprises those due additional amounts between 2018 and 2020 who still receive Universal Credit. The third group includes those due payments from 2018 onwards who no longer receive Universal Credit.
Each group faces different processing timelines due to varying complexities in their cases. The first group consists of around 35,000 people who can expect their payments by August 2025.
Over 4,000 of these claimants have already received their compensation. Couling described this group as the “easiest” to process because payments can be made automatically using the digital system.
These are individuals due an additional amount of transitional SDP element for 2020 onwards. They continue to receive Universal Credit today, which simplifies the payment process.
The DWP has prioritised this group in its payment schedule due to the straightforward nature of their cases. The second group includes 15,000 people who will begin receiving payments by the end of March 2025.
LATEST DEVELOPMENTS:
Benefit claimants are in need of support in the middle of the cost of living crisis
GETTY
This group is due additional amounts for the period between 2018 and 2020. They also continue to receive Universal Credit today.
Couling explained these cases are “slightly more complex” because they involve converting from a manual SDP payment to being paid via the Universal Credit system.
Despite this added complexity, the DWP still expects to complete all payments to this group by August 2025.
These claimants will follow the first group in the payment schedule but still meet the overall completion target.
