DWP Universal Credit claimants could be owed around £5,000

Disabled benefit claimants affected by a transition error to Universal Credit could be entitled to compensation exceeding £5,000 each, according to legal experts. The Department for Work and Pensions (DWP) has confirmed it will allocate £452 million to compensate approximately 57,000 people who lost the Severe Disability Premium (SDP) during the transfer from legacy benefits like Employment and Support Allowance (ESA) to Universal Credit.

The issue was highlighted following two High Court rulings between 2018 and 2019, which found that the DWP failed to protect claimants' incomes during the transition. As a result, many people experienced a reduction in their benefit payments.

To date, the DWP has compensated approximately 44,000 claimants. However, around 13,000 complex cases remain unresolved. The department has committed to settling these outstanding claims by September 2025. Ryan Bradshaw, a solicitor at Leigh Day who represented the claimants, expressed concerns about the compensation process.

He said: “While we welcome the announcement of back payments, there are questions that need to be answered. There needs to be an agreed lawful calculation method in place which can be easily checked by benefits claimants who have missed out to the tune of up to £180 a month before 2019.”

Mr Bradshaw also criticised the DWP's approach, telling the Independent: “It is regrettable that the DWP has pressed ahead with making compensation payments without notice to us in circumstances where our legitimate concerns are yet to be addressed.”

He added: “I am glad to have settled this claim on behalf of my clients. However, there are thousands of others who have been similarly affected who have not been in a position to bring a claim like this. "They too will have suffered unnecessary stress.

"A suitable scheme, compensating all the people who have endured discrimination at the hands of the DWP, ought to be urgently put in place. The mistakes made here should never be repeated.”

The DWP said: “We are fully committed to identifying and paying eligible claimants who have already moved to Universal Credit following a change in their circumstances. This is a complex undertaking and the majority of claimants affected by the court judgment have now been paid, and work is ongoing to pay all other eligible claimants as soon as possible.”

Eligibility and payment details

To qualify for compensation, claimants must have been receiving Universal Credit that included a transitional SDP or would have been entitled to one had it not been eroded. Additionally, they must have met one of the following conditions immediately before their transition to Universal Credit:

• Entitlement to an income-based legacy benefit that included an Enhanced Disability Premium.
• Entitlement to an income-based legacy benefit that included the Disability Premium.
• Entitlement to an income-based legacy benefit that included the Disabled Child Premium, or Child Tax Credit which included the Disabled Child Element (non-severely disabled category).

The compensation is calculated based on the monthly value of the lost premium between the claimant's transition to Universal Credit and the introduction of new income protection regulations in February 2024.

The potential monthly rates are:

• Enhanced Disability Premium (single): £84
• Enhanced Disability Premium (couple): £120
• Disability Premium (single): £172
• Disability Premium (couple): £246
• Disabled child (per child): £177

Given the number of affected claimants and the monthly compensation rates, individual payouts could exceed £5,000, depending on the duration of the underpayment.