The Department for Work and Pensions (DWP) is issuing compensation payments of up to £5,000 to individuals who lost critical disability-related premiums when they transitioned from legacy benefits to Universal Credit before January 2019. This article explains who qualifies, how to check your eligibility, how the process works, and what you can do to ensure you don’t miss out.
Summary Table: DWP Compensation Worth £5,000
| Feature | Details |
|---|---|
| Maximum Compensation | Up to £5,000 |
| Eligible Premiums Lost | Severe Disability Premium (SDP), Enhanced Disability Premium (EDP), etc. |
| Transition Period | Claimants who moved to Universal Credit before January 2019 |
| Notification Method | DWP will notify most eligible claimants directly |
| Claim Process | Automatic for most; manual follow-up advised if not contacted |
| Payment Deadline | Payments issued in phases until August 2025 |
| Support Services | Citizens Advice, Help to Claim, Universal Credit Helpline |
| Official Website | GOV.UK – Universal Credit |
Background: The Transition from Legacy Benefits
Universal Credit was introduced to replace six legacy benefits, including Employment and Support Allowance (ESA), Jobseeker’s Allowance (JSA), and Income Support. During this transition, individuals receiving disability premiums, such as the Severe Disability Premium (SDP) or Enhanced Disability Premium (EDP), saw those additional supports vanish when they switched to Universal Credit.
Legal action and advocacy from disability rights organisations revealed that this change unfairly penalised disabled individuals, and courts found the DWP’s actions to be discriminatory. In response, the DWP launched a compensation scheme to address this loss.
Who Is Eligible?
Not all Universal Credit claimants will receive compensation. To qualify, you must meet all of the following conditions:
- You previously received legacy benefits (ESA, JSA, or Income Support).
- You were in receipt of SDP, EDP, or another qualifying disability premium.
- You transitioned to Universal Credit before January 2019.
- You experienced a loss of income due to the removal of disability premiums.
Important: If you moved under the managed migration system after January 2019, when protections were put in place, you likely do not qualify.
How Much Can You Receive?
The compensation amount varies. While the maximum payout is £5,000, most will receive less depending on:
- The duration you went without the premium payments.
- Which specific premiums you lost.
- The overall financial impact the transition caused.
Each claimant will receive a detailed breakdown showing how their compensation was calculated.
How the Process Works
Most affected individuals will not need to apply. The DWP has begun identifying eligible people and will notify them by letter. The letter will contain:
- Confirmation of eligibility
- Payment amount
- Calculation breakdown
- Estimated date of payment
If You Haven’t Been Contacted
If you believe you meet the criteria and haven’t been contacted:
- Call the Universal Credit Helpline: 0800 328 5644
- Provide Your National Insurance Number
- Gather Evidence: Keep any legacy benefit letters showing you received SDP or EDP.
- Seek Help: Contact Citizens Advice or a welfare rights organisation for support.
Payment Timeline
The DWP has already started disbursing compensation and will continue issuing payments in stages through August 2025.
Expect the following process:
- Receive notification letter (if eligible)
- Payment issued directly to your bank account
- Final confirmation letter after funds are deposited
What If You Disagree With the Decision?
If you are denied compensation but believe this is incorrect, take the following steps:
- Request a Mandatory Reconsideration: Ask the DWP to review your case.
- Submit a Formal Complaint: Use the complaints process on the GOV.UK site.
- Appeal to a Tribunal: If the reconsideration fails, escalate to a tribunal.
Consider getting advice from a legal expert or benefits adviser to strengthen your appeal.
Additional Support Available
While this is a one-time compensation payout, other ongoing support may be available for Universal Credit recipients:
- Budgeting Advances: Interest-free loans for large expenses.
- Discretionary Housing Payments: Help for rent shortfalls.
- Council Tax Reduction: Apply through your local council.
- Food Bank Access: Ask Citizens Advice or your GP for referral.
Real-Life Example
Claire, a 47-year-old from Leeds, received Income Support with the Severe Disability Premium. She moved to Universal Credit in late 2018 and saw her income drop by nearly £600 per month. After a review, the DWP awarded her £4,800 in compensation, covering her loss for the duration until protections were in place.
FAQs About DWP Compensation Worth £5,000
Q. Who qualifies for the £5,000 compensation?
Ans. People who lost disability premiums like SDP or EDP after moving to Universal Credit before January 2019.
Q. Do I need to apply?
Ans. No, most eligible people will be contacted automatically. Call the DWP if you’ve not heard anything.
Q. When will payments be made?
Ans. Between now and August 2025, in phased instalments.
Q. Can I appeal a rejection?
Ans. Yes, you can request a mandatory reconsideration and appeal to a tribunal if necessary.
Q. Where can I get help?
Ans. Citizens Advice and the Help to Claim service offer free, expert support.
Official Link:
GOV.UK – Universal Credit
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