Alicia
The Department for Work and Pensions (DWP) has established a major compensation scheme worth £452 million to reimburse around 57,000 benefit claimants.
These individuals lost vital Severe Disability Premiums (SDP) and Enhanced Disability Premiums (EDP) during their transfer from legacy benefits (like ESA) to Universal Credit.
While most have been paid, roughly 13,000 complex cases remain unresolved and are expected to be completed by September 2025.
However, lawyers from Leigh Day argue the DWP must provide transparency about how these payments are calculated.
They warn that some payouts may be legally incorrect, and in some cases, claimants have been informed their compensation might push them into bank balances that could reduce their future benefits—an outcome they call “scandalous.”
Detailed: Compensation Scheme Snapshot
| Category | Details |
|---|---|
| Total compensation fund | £452 million |
| Number of affected claimants | ~57,000, including those owed SDP and EDP |
| Cases already paid | Majority of beneficiaries |
| Complex cases pending | ~13,000, expected resolved by September 2025 |
| Estimated compensation per person | Could exceed £5,000 each |
| Legal concerns | Lack of transparent calculation method; risk of erosion deductions |
| Risk highlighted by lawyers | Some payments could inadvertently reduce benefits due to high bank balances |
| Lawyers’ demand | Public and verifiable calculation method for assessments |
Why This Matters: Injustice Exposed
Many disabled individuals were unfairly stripped of income protection when transitioning to Universal Credit—despite assurances from the DWP.
The loss of SDP/EDP translated into monthly income drops, estimated at £180 per month. The compensation scheme aims to rectify this—but the lack of clarity around how payments are structured has sparked legal and ethical concerns.
Indeed, a High Court ruling had earlier labeled the DWP’s failure to protect these claimants as unlawful, prompting organized legal pressure and eventually this repayment initiative.
Legal Call to Action: Demanding Fairness
Ryan Bradshaw from Leigh Day stresses that while compensation is welcome, an agreed-upon formula is vital. Payments have begun, but without addressing concerns such as “erosion” mechanisms or verifying that benefit cuts won’t follow, the compensation risks causing further harm.
Claimants and their representatives demand a transparent, fair, and contestable calculation method that they can review themselves in writing.
What the DWP Has Said
The DWP maintains it is committed to identifying and paying eligible claimants, stating: “This is a complex undertaking.” They affirm that most affected individuals have been paid, and reassure that the remaining 13,000 complex cases will be addressed promptly.
The DWP’s £452 million compensation scheme marks a vital step toward remedying the injustices faced by disabled individuals lost in the shift to Universal Credit. Yet, the push from lawyers underscores that justice is more than payment—it’s transparency.
Claimants need to understand exactly how their compensation figures are calculated and be assured that these payments won’t inadvertently reduce future support.
With 13,000 cases still unresolved, the months ahead are crucial in restoring trust and ensuring fairness for those affected.
FAQs
Who qualifies for this compensation?
Individuals who had transitional SDP included in their Universal Credit—specifically those who received disability-related legacy benefits like ESA and lost SDP/EDP during migration.
How much can each claimant expect?
Compensation may exceed £5,000 per person, depending on lost premiums and duration of underpayment.
Why are lawyers demanding more transparency?
They argue that without a clear, lawful calculation method, claimants may still face reductions in benefits—even after receiving compensation—due to mechanics like “erosion” of payments.