Tens of thousands of benefit claimants are set to receive compensation from the Department for Work and Pensions (DWP) following a court ruling. The payments, which could reach £5,000 per person, will be issued to those who lost their Severe Disability Premiums (SDP) when moving to Universal Credit.
The compensation applies to approximately 57,000 people who were financially disadvantaged by the transition from legacy benefits. According to Leigh Day, the law firm representing the claimants, the payments will address income losses suffered between 2018 and 2020, as well as ongoing shortfalls since 2020.
Court ruling forces DWP to act
The legal battle stems from the government’s failure to maintain financial protections for disabled claimants during the shift to Universal Credit.
Previously, individuals receiving Employment and Support Allowance (ESA) and other legacy benefits could qualify for SDP, an additional sum to cover extra living costs. However, those who transitioned to Universal Credit found that their SDP entitlement was removed.
According to Leigh Day, the High Court ruled that the DWP’s transitional protection measures were inadequate, leaving thousands worse off. The ruling mandates that affected claimants receive compensation to cover the lost benefits.
Neil Couling, a senior official at DWP, confirmed the payments, stating: “The courts have decided on all of these, and we are now moving to implement the various judgements of the courts in those cases.”
The three groups eligible for compensation include those:
- Entitled to additional SDP transitional protection from 2020 onwards and still receiving Universal Credit.
- Due an additional amount between 2018 and 2020 and still on Universal Credit.
- Who lost SDP from 2018 onwards but are no longer receiving benefits.
Claimants describe financial hardship
The loss of Severe Disability Premiums had a significant impact on claimants, many of whom rely on benefits to cover essential expenses.
Philippa, 39, from Chesterfield, told Leigh Day: “When you’re on benefits, you don’t feel secure. Every day you wait for the little brown envelope.” She explained that the loss of SDP meant struggling to afford nutritious meals and basic necessities.
The ruling could set a precedent for future benefit-related legal challenges, as campaigners continue to scrutinise the DWP’s policies. The department has stated that it will begin processing payments later this year, though a specific timeline has not yet been confirmed.
Claimants are advised to await official correspondence from the DWP regarding eligibility and payment procedures. Legal representatives continue to urge affected individuals to seek guidance to ensure they receive the correct amount.
Stricter benefit rules add pressure on Universal Credit claimants
With the DWP implementing both compensation payments and stricter sanction guidelines, Universal Credit claimants face a period of significant change. While some individuals are set to receive up to £5,000 in compensation due to past financial losses, others could see their benefits reduced if they fail to meet work-related requirements.
The new sanction rules clarify when payments can be cut, reinforcing the importance of fulfilling claimant commitments, such as attending job search meetings and participating in training programs.
Meanwhile, the compensation scheme addresses the SDP shortfalls, ensuring that claimants who were financially disadvantaged by the shift from legacy benefits receive appropriate redress.
