The Department for Work and Pensions (DWP) revealed that approximately 57,000 benefit claimants could claim compensation of up to £5,000. The addition came following legal decisions made regarding particular vulnerable claimants who lost financial support while transferring to the new Universal Credit (UC) from legacy benefits.
Why They Are Compensating
The whole fiasco is because of the fact that many “legacy benefits” have been consolidated and migrated to the new Universal Credit. Many of them are patients who previously received the Severe Disability Premium, which has now disappeared in the newer system, with an income fall of nearly £180 a month per individual.
Legal challenges in 2018 and 2019 determined that DWP had failed adequately to secure such persons’ incomes. Compelling rulings such as these led DWP to commit to a compensation scheme, now including one-off payments of up to £5,000 depending upon individual circumstances.
Who Could Be Eligible?
DWP has highlighted three main groups that could qualify for these payments.
- First among them would be current recipients of Universal Credit who have been entitled to the SDP transitional element since 2020. About 35,000 such claimants exist, and their payments will, therefore, be processed automatically by the DWP’s digital systems.
- Some 15,000 people fall in the second group: those still claiming Universal Credit but who are actually owed back pay for the period 2018-2020. These cases are more complex and require manual processing, which may cause delays.
- The third group comprises close to 7,000 case-holders, but most of them no longer even get Universal Credit. Still, they are to be compensated for the period starting from 2018. The DWP is currently brainstorming on how best to handle those cases, which may also involve the extra verification procedures.
How Much Could You Get?
How much a claimant will ultimately receive in compensation depends not only on how much they lost during the transition but also on the length of time they felt the effect. The money could be anything between a few hundred pounds to just under £5,000, depending upon individual circumstances. The payments are meant to represent the losses that were suffered during the transition to UC.
When Will Payments Be Made?
The DWP has started making payments, first to the cohort that had received the transitional element from 2020. Yet, the goal is to process all payments by August 2025. Those in the second and third groups may have to wait longer due to manual case reviews and eligibility checks, which add complexity.
What Should You Do Again?
DWP will contact any eligible individual and communicate direct information about how much they can expect to pay. However, if you believe that you are one of the three groups but have not received any news yet, you can approach the DWP through official channels. You can also consult a benefits adviser or services like Citizens Advice for further help in navigating the process.
Final Thoughts
This marks an important step toward addressing the wrong done to thousands of disabled and vulnerable people. If, having transferred onto Universal Credit, one had formerly received the Severe Disability Premium, one may well be owed a hefty sum. Keep abreast and act when you feel you qualify.