The UK’s Department for Work and Pensions (DWP) has announced that thousands of benefit claimants will receive compensation following major court rulings. The payments, which could be as much as £5,000 per person, are set to be distributed by August this year. This follows legal battles where the courts found that certain claimants lost out financially when they transitioned from legacy benefits to Universal Credit.
Why Are Claimants Receiving Compensation?
This compensation scheme follows two key rulings by the High Court between 2018 and 2019. These rulings found that the government failed to protect the incomes of people who lost their Severe Disability Premiums (SDP) when moving to Universal Credit.
In 2020, the DWP attempted to challenge these rulings in the Court of Appeal but was unsuccessful. As a result, the department must now compensate affected claimants. Law firm Leigh Day, which fought the case, estimates that some people may receive over £5,000.
Who Will Receive Compensation?
The DWP has identified three main groups of people who will be eligible for payments:
- People who are due extra SDP payments from 2020 onwards and still receive Universal Credit.
- Around 35,000 people fall into this category, and their payments will likely be processed first.
- People who are owed payments for the period between 2018 and 2020 and continue to receive Universal Credit.
- This group includes around 15,000 claimants.
- People who were affected from 2018 onwards but are no longer receiving Universal Credit.
- Approximately 7,000 people belong to this group.
The first group is expected to receive their payments first because their records are digital, making processing easier. However, the other two groups have mixed digital and paper records, which means payments may take longer to process.
How Much Will Claimants Receive?
The amount each person will receive varies, but it is estimated that the loss of income for affected claimants was around £180 per month. In a separate High Court case, the DWP settled with 275 claimants, awarding each between £200 and £3,000 in damages.
Some claimants could receive up to £5,000, depending on how long they were affected.
Impact of the Compensation
For many claimants, this compensation is life-changing. One of the affected individuals, Philippa, 39, from Chesterfield, suffers from fibromyalgia, a chronic autoimmune condition that causes severe pain. She explained that losing her benefits made it difficult to afford essential items, worsening her health condition.
She shared:
“When you’re on benefits, you don’t feel secure. Every day, you wait for the little brown envelope. The compensation has meant the difference between being able to access proper meals versus buying the cheapest ready meals that don’t meet my nutritional needs.”
When Will the Payments Be Made?
The DWP aims to complete all compensation payments by August 2025. The process has already begun, with priority given to claimants whose payments can be processed automatically. However, those with paper records may have to wait longer.
Neil Couling, the senior responsible owner for Universal Credit at the DWP, confirmed:
“The courts have ruled on this, and we are now moving to implement their judgments. The compensation must cover all elements that were lost.”
This compensation scheme is a significant step in rectifying the financial losses faced by thousands of people due to errors in the transition to Universal Credit. With payments expected to reach up to £5,000 per person, this will provide much-needed relief for those who have struggled without their full benefits. While the process may take time for some, the government has committed to ensuring all affected individuals receive the payments they are owed.
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FAQ’s
Who is eligible for the DWP compensation?
Claimants who lost their Severe Disability Premiums (SDP) when moving from legacy benefits to Universal Credit between 2018 and 2020 are eligible.
How much compensation will people receive?
Payments vary, but they could be as much as £5,000 per person, depending on how long they were affected.
When will the payments be made?
The DWP plans to complete payments by August 2025, starting with those who are still on Universal Credit.
How do I know if I will receive compensation?
The DWP will contact eligible claimants directly. If you think you are eligible but have not been contacted, you may need to reach out to the DWP.
Why did the court rule against the DWP?
The court found that the DWP did not do enough to protect claimants’ incomes when transitioning from legacy benefits to Universal Credit, leading to financial hardship.
