DWP gives update on thousands of benefit claimants set for compensation after court battle

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The Department for Work and Pensions (DWP) has given an update following its announcement that tens of thousands of benefit claimants can expect to receive significant compensation in 2025.

Following several major court battles, around 57,000 people are set to receive payments averaging around £2,100 each The DWP previously said it was hoping to complete the scheme for all people by August this year.

However, Neil Couling, the department’s senior responsible owner for universal credit, has now given an update on when exactly different groups can expect their compensation.

The payments will be made to many who were receiving certain disability benefits and moved from ‘legacy benefits’ to universal credit in recent years. These claimants were found to have lost ‘severe disability premiums’ (SDP) in the move, with the DWP not doing enough to ensure their incomes were protected

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The scheme follows two rulings by the High Court between 2018 and 2019, which found the government failed to ensure the benefit payments of these claimants weren’t reduced when they transitioned. In 2020, the DWP made a failed attempt to challenge these rulings at the Court of Appeal.

It was found that monthly loss of income in both cases amounted to around £180. Law firm Leigh Day – who brought the cases – estimates that compensation could worth more than £5,000 per person.

Details of the payment scheme were first announced by Mr Couling at the a Work and Pensions Committee session in February. Speaking about the rulings, he said: “The courts have decided on all of these, and we are now moving to implement the various judgements of the courts in those cases.

“Because the courts decided that the transitional protection we were providing was not large enough, it needed to cover other elements.”

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The senior civil servant outlined three groups of people who can expect a payment:

Giving an update later in the month, he said the first group of around 35,000 people can expect their payments by August 2025, with 4,110 already paid. This is because are the ‘easiest’ to handle, says Mr Couling, as payments can be made automatically using the digital system.

There are 15,000 in the second group, who can expect their payments to begin by the end of March. The later payments are due to them converting from a manual SDP payment to being paid via the universal credit system, making their cases “slightly more complex.” They should also all be paid by August 2025.

However, no deadline is given for the third group of around 7,000 customers. These are people who received an SDP payment either manually or on-system, but have since seen their universal credit claim close. Due to the “more complex” nature of their cases, “analysis is ongoing to determine the level of work required to enable payments to be made” to them, Mr Couling confims.

The compensation scheme was announced earlier this month after the DWP settled a case brought by Leigh Day on behalf of 275 claimants in the high court. Each applicant was awarded between £200 and £3,000 in damages, with the department pledging to address the issue.

Leigh Day partner Ryan Bradshaw represented claimants across the past cases. Responding to the new details of the compensation scheme earlier this month, he said: “It is regrettable that six years since we won our first case regarding the removal of Disability Premiums under Universal Credit the DWP is still making severely disabled people wait for proper compensation.

“The roll out of Universal Credit has been a disaster for many disabled people, who find themselves worse off when transitional protections inevitably end. My most severely disabled clients are generally £2,000 a year worse off now than they were before they claimed Universal Credit and that is without adjusting for inflationary pressure.

“The solution to this is simple, instead of splitting hairs, spinning statistics and delaying progress the DWP should ensure disability premiums are maintained in full for those who qualify for them and that no-one is worse off on Universal Credit either short term or long term.”