DWP to compensate 57,000 benefit claimants up to £5,000

The Department for Work and Pensions (DWP) has announced that nearly 57,000 benefit claimants will receive compensation payments of up to £5,000. This decision follows a court ruling that found the DWP failed to protect the incomes of those who moved from "legacy" disability benefits to Universal Credit. The court discovered that many claimants lost severe disability premiums during the transition. The DWP had attempted to challenge this ruling in 2020 but was unsuccessful. The compensation scheme was set up after the DWP settled a case with law firm Leigh Day, which represented 275 claimants. Those claimants received damages between £200 and £3,000, and Leigh Day predicts that total payouts could reach £5,000. Most eligible claimants are expected to receive their compensation by the end of 2025. To qualify, claimants must have been receiving or previously receiving Universal Credit with a severe disability premium or transitional amount. They must also meet specific conditions regarding legacy benefits. Three groups will receive compensation. The first group includes around 35,000 people who should get payments first, as their cases are simpler. The second group has about 15,000 claimants, and the last group involves around 7,000 participants with more complex cases. Payments will vary based on the individual circumstances of claimants. The DWP is working to sort out the more complicated cases and plans to distribute payments according to the rules that will take effect in February 2024. Each claimant’s payment will reflect what they would have received had those new rules applied earlier. Adjustments will be calculated for each month between their transition to Universal Credit and the new regulations.