If you lost the disability premium you received from your legacy benefits when you switched to Universal Credit, the government is now going to compensate you for it. The United Kingdom’s Department for Work and Pensions (DWP) has admitted that thousands of people who switched to Universal Credit have suffered unfair losses. Now all these people will be given compensation of up to £5,000.
In this article we will know what this scheme is, who is eligible, how much amount can be received, when will the payment be made and what you should prepare for.
Summary of the scheme
This compensation scheme has been created for those who were on Severe Disability Premium (SDP) or Enhanced Disability Premium (EDP) and these payments stopped after coming to Universal Credit. DWP is now providing relief to those who suffered huge financial losses due to this change.
| Detail | Information |
|---|---|
| Purpose of the Scheme | Compensation for those who lost disability premiums |
| Amount | Up to £5,000 maximum |
| Eligibility | Lost SDP or EDP during transition to Universal Credit |
| Application Requirement | No, DWP will contact directly |
| Timeline | March 2025 to August 2025 |
| People Affected | Approximately 57,000 people across the UK |
Background of the scheme
From 2011 to 2019, many people were receiving old benefits such as Employment and Support Allowance (ESA), Income Support, or Jobseeker’s Allowance (JSA). These schemes paid them extra disability premiums to cover the costs of their care and special needs.
But as Universal Credit started, thousands of people lost these extra payments. Some people lost up to £200 or more a month, and this continued for years.
Many people took legal action against this and eventually the DWP had to admit its mistake and introduce this compensation scheme.
Eligibility conditions
To benefit from this scheme, you must meet the following conditions:
- You must have taken Severe or Enhanced Disability Premium before moving to Universal Credit.
- You must have transitioned to Universal Credit before 16 January 2019.
- Your income must have been reduced due to the transition.
- You must not have received appropriate Transitional Protection.
Example
- Jane was receiving ESA and was receiving Severe Disability Premium. In 2018 she switched to Universal Credit and lost £172 per month. She will now be compensated for that loss.
- Daniel and his wife took Universal Credit in 2017 and lost £120 per month in income. They are also eligible for compensation under this scheme.
How much compensation you’ll get
The amount you’ll get depends on how much you’ve lost and for how long.
| Premium Type | Estimated Monthly Loss |
|---|---|
| Enhanced (Single) | £84 per month |
| Enhanced (Couple) | £120 per month |
| Severe (Single) | £172 per month |
| Severe (Couple) | £246 per month |
| Disabled Child Premium | £177 per child per month |
In most cases the compensation can be between £3,000 and £5,000. However, the DWP will decide the amount based on each person’s records, so each payment will be different.
Payment timeline
Payments under the scheme will be made in three stages. The DWP will contact beneficiaries in person.
- 35,000 existing Universal Credit beneficiaries (those who switched after 2020): will be paid until August 2025
- 15,000 beneficiaries (those who switched between 2018 and 2020): will start receiving payments from March 2025
- 7,000 former beneficiaries: their case is a little more complicated, they will receive payments until the end of 2025
You will be sent a letter from the DWP telling you how much you will get and when to expect payment.
What to do to prepare
Although you don’t have to apply, some preparation can help:
- Keep documents and letters from old benefits safe.
- Make sure the DWP has your correct address and phone number.
- Keep an eye on the post as the DWP is sending out letters in stages.
- If there is any confusion, contact Citizens Advice or a local welfare service.
- Beware of any kind of fraud. DWP never asks for bank details through email or text.
Conclusion
This scheme is not just a financial relief but justice for thousands of people who lost income for years through no fault of their own. If you are eligible, this compensation can be a great help to you. Make sure you are prepared, your records are correct, and you are fully armed when your turn comes.
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FAQs
Q1. What is the £5,000 DWP compensation for Universal Credit claimants?
A. It’s a government compensation scheme for people who lost disability-related payments when they moved from legacy benefits to Universal Credit. If you were affected, you could receive up to £5,000 without needing to apply.
Q2. Who is eligible for this DWP compensation payment?
A. Anyone who received Severe or Enhanced Disability Premiums before moving to Universal Credit, especially before January 16, 2019, and then lost those payments during the transition, may be eligible.
Q3. Do I need to apply to get this payment from the DWP?
A. No, you don’t need to apply. The DWP will automatically identify eligible people and send official letters explaining the amount and timeline.
Q4. When can I expect to receive the compensation if I qualify?
A. Payments have already begun for some groups and will continue in phases until August 2025. You’ll receive a letter when your payment is being processed.
Q5. How do I make sure I don’t miss my compensation?
A. Keep your contact details up to date with DWP, save all past benefit-related paperwork, and watch for any official letters in the post. If you’re unsure, contact Citizens Advice for help.
