Thousands of benefit claimants in the UK may soon receive compensation following a legal battle with the Department for Work and Pensions (DWP). The case concerns individuals who experienced financial losses after being moved from legacy benefits to Universal Credit, with some missing out on crucial disability payments.
A new compensation scheme is now being put in place, but many questions remain about how it will be rolled out.
Court Ruling Leads to Compensation for Thousands of Claimants
Up to 13,000 benefit claimants in the UK may be entitled to compensation exceeding £5,000, following a major legal case against the Department for Work and Pensions (DWP). The case concerns individuals who were financially impacted after being moved from legacy benefits to Universal Credit before September 2019, leading to the loss of severe disability premiums (SDP) and enhanced disability premiums (EDP).
The legal action, led by law firm Leigh Day, has already resulted in compensation payouts ranging from £200 to £3,000 for over 275 individuals. However, the broader settlement now being established could extend financial redress to thousands more affected claimants.
Universal Credit Transition and Loss of Benefits
The compensation claims stem from a 2019 High Court ruling, which found that claimants who had been transferred from older disability-related benefits to Universal Credit had suffered financially. Many of these individuals lost crucial financial support, amounting to up to £180 per month, because the government had not initially implemented a system to protect their income.
The ruling led to the creation of the SDP gateway, which prevented similar losses for benefit claimants moving to Universal Credit after 2019. However, those who had already been affected by the transition were left without financial redress until legal action was taken.
Legal Case and Compensation Scheme
The legal challenge, spearheaded by Leigh Day, was brought forward on behalf of two individuals who had lost income due to the Universal Credit transition. This case set a precedent, leading to a broader compensation settlement for others who experienced similar losses.
Ryan Bradshaw, a lawyer at Leigh Day, emphasised that the stress and financial hardship caused by the loss of benefits had negatively impacted many vulnerable individuals. The compensation scheme will not only restore lost income but also address the emotional distress suffered by claimants.
Bradshaw stated:
“There are thousands of others who have been similarly affected who have not been in a position to bring a claim like this. A suitable scheme, compensating all the people who have endured discrimination at the hands of the DWP, ought to be urgently put in place.”
Key facts from the compensation case
- 275 claimants have already received compensation ranging between £200 and £3,000, with further payments expected.
- Up to 13,000 claimants may be eligible for financial redress.
- Some claimants lost both the Severe Disability Premium (SDP) and the Enhanced Disability Premium (EDP) during the Universal Credit transition, resulting in income reductions of up to £180 per month.
- The SDP gateway—designed to prevent similar losses—was only introduced after a 2019 High Court ruling.
- The compensation scheme is not just for financial losses; it also acknowledges the stress and emotional distress suffered by claimants.
- Work and Pensions Secretary Liz Kendall has not yet commented publicly on how the compensation will be rolled out to all affected individuals.
- The government has yet to clarify how those eligible will be able to claim their compensation.
Impact on Claimants
Among those affected is Philippa, a 39-year-old from Chesterfield, who has fibromyalgia, a chronic autoimmune condition causing widespread pain and fatigue. She described how the loss of disability payments left her struggling to afford essential items.
“When you’re on benefits, you don’t feel secure. Every day you wait for the little brown envelope,” she said.
The compensation she has now received has allowed her to access nutritionally balanced meals, significantly improving her quality of life.
The DWP has acknowledged the ruling and confirmed that the compensation process is now underway. However, the department has not yet provided full details on how thousands of additional affected benefit claimants can apply for compensation.
