The Department for Work and Pensions (DWP) has announced a £5,000 compensation scheme for around 57,000 benefit claimants who were financially affected when they transitioned from legacy benefits to Universal Credit. This compensation aims to make up for the removal of Severe Disability Premiums (SDP), which caused many claimants to lose out financially. Payments will be made by the end of summer 2025.
Here’s everything you need to know about who qualifies for the compensation and how to apply.
Who Is Eligible for the £5,000 Compensation?
To qualify for the Universal Credit compensation, claimants must meet the following criteria:
- Received Universal Credit with an SDP element or transitional amount.
- Before switching to Universal Credit, you must have met at least one of the following conditions:
- Entitlement to an income-based legacy benefit that included an Enhanced Disability Premium.
- Entitlement to an income-based legacy benefit that included a Disability Premium.
- Entitlement to an income-based legacy benefit with the Disabled Child Premium, or Child Tax Credit with the Disabled Child Element (non-severely disabled category).
- If you meet these conditions, you may be eligible for the compensation.
Why Is the DWP Paying Compensation?
The DWP was found guilty in several court cases where it was ruled that claimants did not receive enough transitional protection when they moved from legacy benefits to Universal Credit. The courts ruled that the compensation should cover the missing elements that claimants were not given.
Neil Couling, the DWP’s senior responsible officer for Universal Credit, confirmed that all court rulings would now be fully implemented, meaning claimants who were wronged will be compensated.
How Much Will You Receive?
The exact amount of compensation you’ll receive depends on your individual circumstances. Some claimants could receive up to £5,000, while others may receive a lower amount based on their eligibility.
The DWP aims to ensure that all eligible claimants are compensated fairly.
When Will the Payments Be Made?
The DWP has confirmed that the compensation payments will be completed by the end of summer 2025. If you are eligible, you should receive your payment before then. It’s important to check your Universal Credit records or contact the DWP to ensure you receive the compensation you are owed.
Why Did This Compensation Scheme Arise?
The DWP’s failure to properly protect claimants during the Universal Credit transition has caused many disabled claimants to be worse off financially. For some, this has meant a loss of up to £2,000 per year, even before considering the effects of inflation.
Ryan Bradshaw, a Leigh Day partner who represented the claimants in court, criticized the delay in the compensation process. He highlighted that the removal of the Disability Premiums has caused significant financial hardship for many individuals.
What Should You Do to Ensure You Receive Compensation?
If you think you qualify for the Universal Credit compensation, check your Universal Credit records or contact the DWP directly to ensure your eligibility. The DWP has stated that payments will be made by the end of summer 2025, so it’s important to act now and verify your eligibility.
The £5,000 compensation scheme will help thousands of Universal Credit claimants who were financially impacted by the transition from legacy benefits. Severe Disability Premiums were removed in the process, causing many claimants to lose out. The DWP is now compensating eligible claimants to ensure they receive the support they were originally promised.
If you are eligible for compensation, make sure to check your records or reach out to the DWP to confirm your details and receive your payment by summer 2025.
FAQ’s
Who qualifies for the £5,000 Universal Credit compensation?
To qualify for the **£5,000 compensation**, claimants must have received **Universal Credit** with an **SDP element** or **transitional amount** and met specific eligibility conditions before switching to Universal Credit.
Why is the DWP paying compensation for Universal Credit claimants?
The **DWP** lost court cases that ruled claimants did not receive enough **transitional protection** during the move from legacy benefits to **Universal Credit**. Compensation will cover missing elements.
How much will I receive from the DWP compensation?
The amount of compensation will vary based on individual circumstances. Some claimants could receive up to **£5,000**, while others will receive a smaller amount based on eligibility.
When will the DWP compensation be paid?
The **DWP compensation payments** will be made by **the end of summer 2025**. Ensure that you check your **Universal Credit records** or contact the DWP for confirmation.
What should I do if I think I qualify for compensation?
If you believe you qualify for **Universal Credit compensation**, check your **Universal Credit records** or contact the **DWP** to confirm your eligibility and ensure you receive the compensation you are owed.
