The DWP Benefit Claimants Compensation is available for those who have faced an average loss of £180 during switching from legacy benefits to Universal Credit. This is due to the protection failure of income for those who are on severe disability premiums. People can expect an average compensation amount of £2,100, which could go up to the anticipated limit of £5,000.
The DWP has now provided an update following its announcement that approximately 57,000 of benefit claimants can expect to receive compensation by August 2025. From a total of 35,000 claimants, almost 4,110 have received their payments in the first group and for the second group, the compensation amounts will start from late March 2025.
DWP Benefit Claimants Compensation
The DWP Benefit Claimants Compensation refers is provided by the DWP in the UK to compensate benefit claimants who were adversely affected by the transition from legacy benefits to Universal Credit. The government has now provided the guidelines about the exact timeline of this compensation for ten of thousands of claimants.
This compensation scheme comes on the spot after two rulings by the High Court during 2018 and 2019 that found the DWP had failed to protect the incomes of certain claimants, particularly those receiving severe disability premiums (SDP).
DWP has made a failed attempt to challenge these rulings in 2020. During the transition of legacy benefits to Universal Credit, many claimants have faced an average loss of £180 per month. In response to these rulings, the DWP has announced a compensation scheme to address the financial loss of affected and suffered vulnerable people.
Almost 57,000 people can expect to receive this compensation and the average amount can be around £2,100 for each claimant. According to the Law firm Leigh Day estimations, this compensation could be £5,000 based on the specific circumstances. This compensation will be provided into 3 groups based on the complexity of the case.
Who will receive DWP Benefit Claimants Compensation?
To know who will receive DWP Benefit Claimants Compensation, thoroughly read below given criteria. Three groups of people who were receiving specific disability benefits and switched from legacy benefits to Universal Credit in recent years will receive this compensation.
First Group: Claimants receiving Universal Credit with additional transitional SDP Elements for 2020 onwards
- These are individuals who continue to receive Universal Credit and are owed additional transitional Severe Disability Premium (SDP) elements from 2020 onwards. This largest group includes almost 35,000 claimants.
Second Group: Claimants owed back payments from 2018 to 2020:
- This second group includes approximately 15,000 claimants who are due additional amounts for the period between 2018 and 2020 and continue to receive Universal Credit.
Third Group: Claimants who lost sdp and no longer receive Universal Credit:
- These individuals lost their SDP but no longer receive Universal Credit, making their cases more challenging to trace and calculate. Almost 7,000 claimants are eligible to receive under this group.
How much will be DWP Benefit Claimants Compensation?
The payment details were firstly announced by Mr Couling at a Work and Pensions Committee session in February. The DWP Benefit Claimants Compensation is expected to benefit almost 57,000 people. The average amount can be £2,100 per person while it goes up to £5,000, depending on specific circumstances.
The main intention behind this payment is to help those who suffer after facing financial loss. While this compensation can be beneficial, the timeline and complex nature of this payment highlights the challenges faced by the claimants in navigating the benefit system.
When will DWP Benefit Claimants Compensation be distributed?
Ten of thousands of people will receive DWP Benefit Claimants Compensation according to the recent government updates. Neil Couling, the department’s senior responsible owner for universal credit has provided an update on the exact timeline of this compensation, especially for those people who have lost SDP at the time of moving from legacy benefits to Universal Credit.
The Department for Work and Pensions (DWP) has outlined a detailed timeline for the distribution of these payments, which is divided into three groups based on the complexity of their cases. Here, claimants can check the timeframe of their compensations based on their group.
- First Group: The first group consists of approximately 35,000 claimants and the payments are set to be completed by August 2025. In this group, almost 4,110 claimants have received their payments and the remaining will receive soon.
- Second Group: The second group includes around 15,000 claimants and according to the DWP plans, this group of people will start receiving their payment by the end of March 2025. The timeframe of completing the payment for this group is also by August 2025.
- Third Group: The payments for the third group is more complex and it will assist almost 7,000 claimants. The DWP has not provided a specific timeline for those groups while the department has stated that “analysis is ongoing” to determine the appropriate compensation for these claimants. Claimants who fall in the third group must stay in touch with official sources to get the most updated deadline soon.