The Department for Work and Pensions (DWP) has confirmed that tens of thousands of benefit claimants can expect to receive significant compensation after several major court battles.
Around 57,000 people will receive payments, thought to be as large as £5,000, with the department hoping to complete the scheme by August this year.
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
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 confirmed by Neil Couling, the department’s senior responsible owner for universal credit. Speaking to the Work and Pensions Committee 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.”
The senior civil servant outlined three groups of people who can expect a payment:
- People due an additional amount of transitional SDP element for 2020 onwards, and who continue to receive universal credit
- People due an additional amount for the period between 2018 and 2020, and who continue to receive universal credit
- People due an additional amount relating from 2018 onwards who are no longer receiving universal credit
There are around 35,000 people in this first group, who can likely expect their payments first. This is because Mr Couling says their cases will be the ‘easiest’ to handle as payments can be made automatically using the digital system.
There are 15,000 in the second group and 7,000 in the third, all with ‘mixed clerical and digital record’ which he says the department needs to find a solution to address.
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.
One of Leigh Day’s clients, Philippa, 39, from Chesterfield, suffers from chronic autoimmune condition fibromyalgia. This causes pain throughout her body, dehydrated discs in her spine, and brain fog.
She shared last week how the loss of her DWP payments exacerbated her health issues as she was left unable to afford even the essentials. Philippa said: “When you’re on benefits, you don’t feel secure. Every day you wait for the little brown envelope.
“The compensation has meant the difference between being able to access prepared meals which cover my nutritional needs, versus buying the cheapest ready meals which are not nutritionally balanced enough.
Leigh Day partner Ryan Bradshaw represented claimants across the past cases. Responding to the new details of the compensation scheme, 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.”
