A major update from the Department for Work and Pensions (DWP) has brought long-awaited news: tens of thousands of disability benefit claimants are receiving compensation for lost disability premiums worth £1,000s each.
This follows a legal challenge that confirmed many lost out on crucial payments when they were moved to Universal Credit too early, leaving some claimant incomes cut by around £180 per month.
What Happened
Claimants who were previously on legacy benefits like ESA (Employment and Support Allowance) had received extra support through Severe Disability Premium (SDP) or Enhanced Disability Premium (EDP).
However, when they were transferred over to Universal Credit before January 2019, these safeguards were not properly applied, resulting in significant loss of income.
After legal action, DWP agreed to issue compensation for months of missed payments.
Who Is Eligible for Compensation?
Claimants qualify if they:
- Moved from legacy benefits (e.g. ESA, IS, JSA) onto Universal Credit before February 2024, and
- Lost access to SDP or EDP they’d previously been eligible for, or
- Lost a disabled child premium they were owed.
This compensation scheme follows multiple High Court rulings and is administered under revised transitional protection regulations.
Compensation Rates & How It’s Calculated
Compensation is calculated by reconstructing what each claimant would have received if transitional protection had applied:
| Benefit Lost | Single Claimant (per month) | Couple (per month) | Child Premium (per child) |
|---|---|---|---|
| Enhanced Disability Premium | £84 | £120 | — |
| Disability Premium | £172 | £246 | — |
| Disabled Child Premium | — | — | £177 |
These amounts were payable for every month between the claimant’s transition date and February 2024, when updated protections began. A process called “erosion” reduces payments as other Universal Credit elements increase over time.
Current Status—Who Has Been Paid and Who Remains
- Total claimants affected: ≈ 57,000
- Payments completed: Most have now been paid
- Cases still pending: ≈ 13,000 complex cases, expected to be resolved by September 2025
- Total cost to DWP: Approx. £452 million
- Individual compensation: Often exceeding £5,000, especially for longer periods of missed premiums
Why This Matters
- Significant Lost Income: Many claimants experienced a drop in benefits of around £180 per month, often lasting years.
- Financial Justice: Clemency closes a gap caused by administrative failure during migration to Universal Credit.
- Legal Precedent: The High Court ruling confirms claimants can challenge government errors affecting income.
The DWP has formally acknowledged the issue and pledged to prevent similar mistakes in the future.
What Affected Claimants Should Do
- No action needed if your case is already being processed.
- If you believe you were affected but haven’t been contacted, consider reaching out to the DWP or getting advice.
- Keep an eye on your Universal Credit statements for updates or arrears appearing.
- Be aware the remaining complex cases must be settled by September 2025.
This major update from DWP confirms that thousands of disabled benefit claimants—previously moved to Universal Credit—are entitled to substantial back payments due to lost SDP, EDP, or child disability premiums.
Though most of the 57,000 affected individuals have already been compensated, around 13,000 complex cases remain, with a final deadline of September 2025.
With compensation potentially reaching £5,000+ per person, this effort corrects years of financial shortfalls and sets an important precedent for accountability and fairness.
If you were affected by this error and have not heard from the DWP, now is the time to check your status—financial redress may be due.
FAQs
How do I know if I’m eligible for this compensation?
You’re eligible if you moved from legacy benefits to Universal Credit before February 2024 and lost a Severe or Enhanced Disability Premium or Disabled Child Premium.
How much could I receive?
Payments vary by time and type of premium lost, but many claimants get over £5,000, especially when premiums were missed for multiple years.
Do I need to apply myself to get paid?
No. Most eligible claimants will be contacted and paid automatically. Only contact DWP if you suspect you were overlooked or never received a payout.