The Department for Work and Pensions (DWP) has announced a new compensation scheme for benefit claimants impacted by the transition to Universal Credit. According to GBNews<\/a><\/strong>, the scheme will provide payments of up to \u00a35,000 to approximately 57,000 individuals. <\/p>\n\n\n\n
This compensation scheme follows two critical High Court rulings between 2018 and 2019<\/strong>. These rulings concluded that the government failed to ensure that benefit payments were not reduced when claimants transitioned to Universal Credit. The DWP<\/strong><\/a> attempted to challenge these rulings in 2020 at the Court of Appeal but was unsuccessful.<\/p>\n\n\n\n
In February 2025, Neil Couling<\/a>, the DWP’s senior responsible owner for Universal Credit, confirmed that most eligible claimants would receive compensation before the end of 2025.<\/p>\n\n\n\n
Additionally, claimants must meet one of the following three conditions before moving to Universal Credit<\/a>: they must have been entitled to an income-based legacy benefit that included the Enhanced Disability Premium, the Disability Premium, or the Disabled Child Premium. <\/p>\n\n\n\n
The DWP has identified three distinct groups of claimants, each with a different timeline for receiving compensation payments. The first group consists of claimants who are due an additional SDP element from 2020 onwards and continue to receive Universal Credit. <\/p>\n\n\n\n
This group is expected to receive payments by August 2025, with over 4,000 claimants already having received their compensation. Payments for this group are the easiest to process, as they can be made automatically through the DWP’s digital system<\/a>.<\/p>\n\n\n\n