The UK’s Department for Work and Pensions (DWP) is compensating approximately 57,000 benefit claimants who lost Severe Disability Premiums (SDP) when transitioning to Universal Credit. Payments of up to £5,000 will be issued automatically by August 2025, with no application required. This article explains who qualifies, how much compensation you might receive, and what steps to take if you believe you are eligible.
DWP to Pay Compensation to 57,000 Benefit Claimants
The DWP’s compensation plan addresses financial losses suffered by thousands of disabled claimants during the transition from legacy benefits to Universal Credit. With payments already underway, eligible individuals will soon receive the financial relief they are owed. If you believe you qualify but have not been contacted by mid-2025, reach out to the DWP for assistance.
| Aspect | Details |
|---|---|
| Who is eligible? | Claimants who lost SDP when moving to Universal Credit |
| Compensation amount | Up to £5,000, depending on individual circumstances |
| Number of claimants | Approximately 57,000 |
| Payment timeline | Most payments expected by August 2025 |
| Application required? | No—DWP will contact eligible claimants automatically |
| More information | Visit the DWP Official Website |
Background: How Did This Issue Begin?
When the UK introduced Universal Credit to replace legacy benefits such as Income Support and Employment and Support Allowance (ESA), it removed key disability premiums. This transition caused financial hardship for many disabled claimants who previously received the Severe Disability Premium (SDP), resulting in significant income loss.
The Legal Ruling That Changed Everything
In 2018-2019, claimants challenged the DWP in court, arguing that the loss of SDP was unfair. The High Court ruled in favor of the claimants, requiring the government to compensate affected individuals. This new compensation scheme aims to correct prior underpayments and provide fair financial redress.
Who Is Eligible for DWP Compensation?
To qualify for compensation, you must meet the following criteria:
- Transition Period: You moved from legacy benefits to Universal Credit between 2018 and 2020.
- Loss of SDP: You lost the Severe Disability Premium or a related benefit during the transition.
- Current or Past UC Recipient: You are either still receiving Universal Credit or have received it in the past.
The DWP will automatically contact those who are eligible—no application is required.
How Much Compensation Will You Receive?
The amount of compensation depends on how much you lost and the length of time you were affected. Here are the key payment rates:
| Premium Type | Monthly Compensation |
|---|---|
| Enhanced Disability Premium | £84 (single) / £120 (couple) |
| Disability Premium | £172 (single) / £246 (couple) |
| Disabled Child Premium | £177 per eligible child |
Example Calculation:
- If you lost £172 per month for 18 months, you would receive £3,096 in compensation.
- If you lost £120 per month for 36 months, you would receive £4,320 in compensation.
When Will Payments Be Made?
Payments are scheduled in three phases based on claimant status:
| Claimant Group | Estimated Payment Date |
|---|---|
| Current UC Recipients (Post-2020 Transition) | By August 2025 |
| Current UC Recipients (2018-2020 Transition) | Between March and August 2025 |
| Former UC Recipients | Under assessment, expected late 2025 |
If you have not received any updates by mid-2025 and believe you qualify, contact the DWP.
What to Do If You Haven’t Been Contacted
If you believe you are eligible but have not heard from the DWP, follow these steps:
- Check Your Eligibility: Review past benefits and confirm if you lost SDP.
- Be Patient: Payments are staggered; wait until mid-2025 for updates.
- Contact the DWP:
- Phone: Universal Credit helpline at 0800 328 5644
- Online: Log into your Universal Credit account
- In Person: Visit your local Jobcentre Plus
- Seek Advice: If issues persist, consult Citizens Advice or a benefits specialist.
Conclusion
The DWP’s compensation scheme provides overdue financial relief to thousands of disabled claimants who lost Severe Disability Premiums during the Universal Credit transition. With payments being processed throughout 2025, it’s important to stay informed and contact the DWP if you believe you are eligible but have not received compensation.
FAQs
Who will receive the DWP compensation payments?
Eligible claimants who lost Severe Disability Premiums when transitioning to Universal Credit.
Do I need to apply for DWP compensation?
No, the DWP will automatically contact and compensate eligible individuals.
When will I receive my compensation payment?
Most payments will be made by August 2025. Former recipients may wait longer.
How much will I get in compensation?
Up to £5,000, depending on your loss amount and how long you were affected.
What should I do if I haven’t been contacted?
Check your eligibility and contact the Universal Credit helpline if you haven’t heard by mid-2025.