Tens of thousands of benefit claimants are set to receive long-overdue compensation, with payments of up to £5,000 being issued by the Department for Work and Pensions (DWP). A total of 57,000 people were adversely affected during their switch from legacy benefits to Universal Credit and are now eligible for these payouts, with the DWP aiming to conclude the compensation scheme by August 2025.
This massive compensation plan follows two High Court rulings from 2018 and 2019 which determined the Government had failed to protect the incomes of severely disabled claimants. The DWP lost its appeal on these rulings in the Court of Appeal back in 2020. Claimants during this transition experienced monthly income reductions averaging around £180, as they shifted to Universal Credit before proper protections were established.
Neil Couling, DWP's senior responsible owner for universal credit, confirmed, "Most eligible claimants will receive compensation by August 2025," indicating the department's commitment to servicing those affected. Those who were receiving Universal Credit with the Severe Disability Premium (SDP) element or transitional amounts, or would have qualified had the rules been applied earlier, are potentially entitled to payouts.
To qualify for compensation, claimants must have been receiving one of the following right before they transitioned to Universal Credit: 1. An income-based legacy benefit including the Enhanced Disability Premium, 2. An income-based legacy benefit with the Disability Premium, or 3. An income-based legacy benefit linked to the Disabled Child Premium or Child Tax Credit including the Disabled Child Element.
The compensation payments will be backdated from the time of transition to Universal Credit, with new income protection rules becoming effective in February 2025. This means beneficiaries will receive payments for every month they were under the old rules until the new regulations were instated.
The breakdown of how much claimants can expect reveals significant amounts: single individuals receiving the Enhanced Disability Premium can expect £84 each month, couples will get £120, and those on the Disability Premium will receive £172 for singles and £246 for couples. For eligible children, families are set to receive £177 per disabled child per month.
Payment timelines have been outlined by Neil Couling, specifying when different groups will receive their funds: the first group, consisting of approximately 35,000 claimants still on Universal Credit and due additional payments from 2020 onwards, is expected to start receiving payments by August 2025. Over 4,000 from this group have already received their compensation. Next, about 15,000 claimants due payments for the period between 2018 and 2020 will see payments starting by the end of March 2025. The third and final group comprises about 7,000 individuals who no longer receive Universal Credit; no payment deadlines have been established for them as of yet as their cases involve more complex records.
These adjustments come as part of the government’s effort to rectify past wrongs, following the successful legal battles led by claimants against the DWP for inadequate transitional protections. The High Court determined, "The courts found monthly loss of income amounted to around £180," ensuring those affected receive justice after years of advocacy.
Overall, the rollout of this compensation should bring relief to the long-overlooked claimants who suffered financial hardships during their transition. The payments align with the DWP’s initiative to restore the loss incurred by these individuals, bringing much-needed support to severely disabled individuals and their families.
With these funds being anticipated, many are now eager to understand what these payments mean for their households and are watching closely for DWP updates. This compensation not only aims to rectify financial losses but reinforces the Government's commitment to protecting vulnerable populations within society.
