DWP Compensation Update: The Department for Work and Pensions (DWP) has announced a major compensation scheme for approximately 57,000 benefit claimants who lost their Severe Disability Premiums (SDP) when transitioning to Universal Credit (UC). This scheme, which comes after multiple legal challenges, is set to provide backdated payments of up to £5,000 to those affected.
This guide will break down who qualifies, how much compensation will be paid, and how claimants can ensure they receive their rightful benefits.
DWP Compensation Update
| Feature | Details |
|---|---|
| Compensation Amount | Up to £5,000 per claimant |
| Eligible Claimants | Around 57,000 people who lost Severe Disability Premiums (SDP) |
| Key Issue | Loss of £180 per month when moving from legacy benefits to Universal Credit |
| Legal Rulings | Courts ruled that DWP failed to protect disabled claimants financially |
| Payment Duration | Covers past financial losses until February 2024 |
| How to Claim? | Automatic payments for eligible individuals, but some may need to apply |
The DWP compensation payments mark a long-overdue step towards correcting past financial injustices for 57,000 disabled claimants who lost their Severe Disability Premiums (SDP) when moving to Universal Credit. With payments of up to £5,000, this scheme aims to restore financial stability to those who unfairly lost money during the transition.
If you believe you qualify but haven’t received payment, check your eligibility today and contact DWP or Universal Credit support for assistance. Stay updated by visiting Gov.uk for more information.
Why Is the DWP Paying Compensation?
Between 2018 and 2019, multiple legal challenges were brought against the DWP after disabled claimants lost their Severe Disability Premium (SDP) when they were transferred from legacy benefits (like Income Support or ESA) to Universal Credit.
The High Court ruled that the DWP’s policy was unlawful, as it resulted in claimants losing around £180 per month compared to their previous benefits. As a result, the government was ordered to compensate those who were financially disadvantaged.
This compensation scheme ensures that those affected receive backdated payments, correcting the financial losses they suffered.
Who Is Eligible for the DWP Compensation?
To qualify for this DWP compensation payment, you must meet specific criteria:
- You must have been receiving a legacy benefit that included Severe Disability Premium (SDP) before moving to Universal Credit.
- You must have lost financial support due to the transition to Universal Credit.
- You must have been affected between 2016 and February 2024 (when new income protection rules were introduced).
Which Benefits Were Affected?
If you were receiving one of these benefits before moving to Universal Credit, you could be eligible for compensation:
- Income Support (with Severe Disability Premium)
- Jobseeker’s Allowance (JSA) (with Severe Disability Premium)
- Employment and Support Allowance (ESA) (with Severe Disability Premium)
- Housing Benefit (with Severe Disability Premium)
If you’re unsure whether you qualify, check your previous benefit statements or contact DWP customer service.
How Much Compensation Will You Receive?
The compensation payment varies depending on your circumstances and how long you were affected by the financial shortfall. The DWP has outlined the following monthly backdated amounts:
| Premium Type | Monthly Compensation |
|---|---|
| Single Person (Enhanced Disability Premium) | £84 per month |
| Couple Claim (Enhanced Disability Premium) | £120 per month |
| Single Person (Disability Premium) | £172 per month |
| Couple Claim (Disability Premium) | £300 per month |
Example Calculation: If you lost £172 per month for two years (24 months), your total compensation would be £4,128 (£172 × 24 months).
How Will Payments Be Made?
- Automatic Payments: Many eligible claimants will automatically receive their compensation in their bank accounts.
- Manual Claims: If you believe you’re eligible but haven’t received payment, you may need to apply manually through the DWP or Universal Credit portal.
Check your eligibility and payment status on the Gov.uk website
Why Did This Compensation Take So Long?
The DWP initially resisted making payments, arguing that the loss of benefits was due to policy changes rather than unfair treatment. However, a series of court rulings forced the government to acknowledge its error and introduce compensation measures.
By 2020, legal challenges confirmed that thousands of disabled people had been unfairly disadvantaged, leading to increased pressure on the DWP to pay back what was owed.
FAQs
1. Do I Need to Apply for Compensation?
For most people, compensation will be paid automatically. However, if you haven’t received a payment but think you’re eligible, contact DWP’s Universal Credit helpline.
2. When Will I Get Paid?
Payments have already started and will continue throughout 2024. If you haven’t received your compensation yet, check your Universal Credit account or bank statements.
3. Will This Compensation Affect My Other Benefits?
No, the compensation payment is separate from your regular benefits and will not reduce your Universal Credit or other entitlements.
4. Can I Appeal If I Am Not Included?
Yes, if you believe you were unfairly excluded, you can appeal through the DWP complaint system or seek legal advice.
5. Where Can I Get More Information?
For official updates, visit Gov.uk’s Universal Credit page or call the DWP helpline.
