The Department for Work and Pensions (DWP) has confirmed that around 57,000 benefit claimants may be eligible for compensation payments of up to £5,000. This follows legal challenges regarding financial losses suffered by claimants who transitioned from legacy benefits to Universal Credit, particularly those who previously received Severe Disability Premiums (SDP) and Enhanced Disability Premiums (EDP).
Why Are These Payments Being Made?
When Universal Credit was introduced to replace multiple benefits with a single payment system, some claimants experienced substantial reductions in their income. Those receiving SDP and EDP under the old system lost extra financial support, resulting in income cuts of up to £180 per month. After a series of court rulings in 2018 and 2019, it was determined that the transition arrangements were unfair, leading the DWP to introduce a compensation scheme.
Who Is Eligible?
The DWP has categorized the affected claimants into three groups:
- Current Universal Credit Claimants (Post-2020 Adjustments)
Around 35,000 people who continue receiving Universal Credit will be compensated first, as their cases can be processed automatically. - Universal Credit Claimants (2018-2020 Adjustments)
This group consists of about 15,000 people who lost money between 2018 and 2020. Their claims involve both digital and paper records, requiring a more tailored process. - Former Universal Credit Recipients (Post-2018 Adjustments)
Around 7,000 individuals who no longer receive Universal Credit but were affected from 2018 onward will also be compensated.
How Much Will Be Paid and When?
The compensation payments will be up to £5,000, depending on how much claimants lost due to the transition. The DWP has started processing payments, and eligible individuals will be contacted directly.
What Should You Do?
If you believe you are eligible, ensure your contact details with the DWP are up to date. The department will notify claimants automatically, so there is no need to apply separately.
Final Thoughts
This compensation scheme is a significant step toward addressing the financial struggles faced by thousands of disabled individuals during the transition to Universal Credit. It highlights the importance of fairness in the welfare system and the need for continuous assessments to protect vulnerable claimants.
