DWP reveals deadline for thousands of benefit claimants owed compensation after court battle
The payments are being made to people with disabilities who were moved from 'legacy benefits' such as Employment and Support Allowance (ESA) to universal credit in the years before transitional protections were introduced.
These claimants were found to have lost the 'Severe Disability Premium' (SDP) in the move, with the DWP not doing enough to ensure their incomes were protected.
Most of the 57,000 people affected by the issue have now received their compensation. However, the department has said it is working to clear approximately 13,000 cases which are more complex.
Explaining the issue in its annual report, the DWP stated: 'Unfortunately, some underpayments may be owed to customers who no longer have an active ESA claim and restrictions in data make it difficult to identify, assess and correct these errors.'
The department said it was working to complete the work on these errors by September.
While agents are proactively contacting those eligible for compensation, anyone who thinks they may have been affected to make a claim.
The department said it will assess claims on a case-by-case basis based on the evidence given.
The repayment scheme follows two rulings by the High Court between 2018 and 2019, which found the government failed to ensure the benefit payments of affected 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 the monthly loss of income in both cases amounted to around £180. Law firm Leigh Day – who brought the cases – estimates that compensation could be worth more than £5,000 per person.
The DWP has confirmed that the total cost of the repayment exercise is £452m.
A DWP spokesperson said: 'We are fully committed to identifying claimants that are owed arrears and providing the financial support to which they are entitled as quickly as possible, with the majority of these cases having already been resolved.
"We are clear that errors like this one should not happen and have already taken action to avoid future errors.'
Eligibility
To be eligible for compensation, a claimant must be receiving (or had previously received) Universal Credit that includes a transitional SDP, or would have done, had it not been eroded.
They must then have met one of three more conditions immediately before their move to Universal Credit:
They were entitled to an income-based legacy benefit that included an Enhanced Disability Premium
They were entitled to an income-based legacy benefit that included the Disability Premium
They were entitled to an income-based legacy benefit that included the Disabled Child Premium, or Child Tax Credit which included the Disabled Child Element (non-severely disabled category)
Payment rates
There are five possible payment rates, which will be made for each month between the claimant's transition to Universal Credit and when new income protection regulations came into force in February 2024. These back payments will be calculated by giving claimants what they would have been entitled to had the new rules been in place when they transitioned.
The monthly rates are:
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
19 minutes ago
- The Independent
Liverpool ramp up replacement striker search after agreeing Darwin Nunez fee
Liverpool have agreed a deal to sell Darwin Nunez to Saudi Pro League side Al Hilal for an initial £46.2m. The striker, who wanted to leave to go to Saudi Arabia in January, is set to end his three-season spell at Anfield, while Liverpool could now enter the market for another centre-forward. They have had a £110m bid for Alexander Isak swiftly rejected by Newcastle and have indicated they will not raise their offer but are looking for a player they deem of sufficient quality to start, who is available and at what they regard as a fair price. They have already signed one striker this summer, in Hugo Ekitike from Eintracht Frankfurt for £69m, and if they cannot add another, are aware that players such as Florian Wirtz, Rio Ngumoha, Curtis Jones and Jeremie Frimpong can all play in the front three if required. Before Al Hilal made an offer that could rise to £56.6m, including add-ons, Nunez also attracted interest from AC Milan but there were doubts if the Serie A side could meet Liverpool's asking price. Napoli had bid for Nunez earlier in the summer, but without coming close to a sum Liverpool would accept and when they wanted to defer the first payment until 2026, before instead signing attacker Lorenzo Lucca. Nunez joined Liverpool for £64m in 2022, with add-ons taking the potential fee to a club record of £85m. He scored 15 goals in his first season in England and 18 in the second but got just seven in 47 appearances in all competitions last year as Arne Slot preferred to use either the late Diogo Jota or Luis Diaz as his centre-forward. Liverpool rejected Nunez's request to leave in mid-season, wanting to keep him to help their successful bid to win a 20th league title. Should he go now leave, Liverpool will have brought in around £190m for players this summer, following Tyler Morton's move to Lyon for £15m.
The Independent
19 minutes ago
- The Independent
Interest rates live: Rate cut expected by Bank of England despite inflation and Trump tariffs
The Bank of England (BoE) is expected to cut interest rates today down to 4 per cent, despite concerns over still-high inflation and Trump tariffs coming into force. The move would mark a third cut overall this year, and the fifth since the interest rates peaked at 5.25 per cent in August 2024. Members on the Monetary Policy Committee (MPC) are likely to be divided on whether to cut the rate, with divisions over both holding until later in the year - to combat the rate of inflation - and giving a double cut now, which could boost business productivity and employment. Any cut would also be a potential longer-term boost to homeowners, as the mortgage market may price in future lower rates, but would give concerns to savers as the rate at which their money earns interest would decrease. Elsewhere, Halifax released its latest UK house price data showing where property fees have risen fastest, while stock markets including the FTSE 100 are reacting to Trump tariffs coming into effect. Interest rates chart: The fall and rise in the UK Here's a more graphic representation of just how high interest rates rose as inflation spiralled under the last government - and how rates are still only slowly coming back down under this one. For over a decade, borrowing money was super cheap, very nearly free. Anyone with repayments to make between 2020 and 2023 got a bit of a shock to the system if their deal was tracking the base rate, that's for sure. But we are, as the right side of the chart shows, on a steady path downwards in the past year or so. 'Gradual and careful,' the BoE calls it. Plenty say that even this is too fast though, with inflation having been rising once more of late. 7 August 2025 11:47 Supermarket wars continue with new cheapest store The UK has a new cheapest supermarket, if you've not already heard - Aldi lost the title for the first time in two years. You can read more about that here including how loyalty cards impact (or don't!), and you can vote in our poll below to tell us where you shop too! Karl Matchett7 August 2025 11:40 Households still cautious over future tax burdens - expert Aside from being a negative for savers, most households will generally see an interest rate cut as a positive. However, the savings it makes them on bills and borrowing may not feed through to spending immediately, says one expert - because of fears about what lies ahead. That's particularly prevalent given talk of more taxes in the Budget this autumn. 'Investors are primed for an interest rate cut from the Bank of England later today, given the highly sluggish nature of the economy, and the rising unemployment rate,' said Susannah Streeter, head of money and markets, Hargreaves Lansdown. 'There will be hopes that if loans become cheaper, it will help boost consumer and business confidence but there's a long way to go. In the meantime, speculation over potential tax rises in the Autumn Budget may keep households and companies cautious, given the uncertainty over where extra burdens may land. 'There will be a lot of focus on the voting split on the Monetary Policy Committee, given that the views are highly unlikely to be unanimous, and the leaning of members could help indicate the speed of future rate cuts.' Karl Matchett7 August 2025 11:30 Interest rates and mortgages: Saving money, or overpay the difference? If you're on a tracker mortgage rate (or if you're soon to negotiate down a deal from a couple of years ago) then an interest rate cut today could be to your benefit, saving a bit of outgoing money. However, if you still put that into paying off your property (if your terms allow - always check!) then it can save you way more in the long run. Jinesh Vohra, CEO of mortgage app Sprive, said: 'Around one in five (17 per cent) mortgage holders are currently on variable rate mortgages, and if the Bank of England cuts the base rate today, their mortgage rate will drop as a result. 'For example, someone with a £150,000 mortgage at 4.25% over 25 years currently pays around £812 a month. If the rate is cut by 0.25%, their monthly payment would fall to £791 — a saving of £21 a month, or £252 a year. 'While it might be tempting to enjoy that saving, those who can afford to should consider maintaining their current payment level and using the £21 saving to overpay their mortgage instead. Doing so could save them £4,280 in interest and help clear their mortgage 1 year and 1 month earlier. 'Overpaying is one of the most powerful ways to become mortgage-free faster. Even small, regular overpayments can knock years off the term and save thousands in interest — helping mortgage holders reach financial freedom sooner, without stretching their budget.' Karl Matchett7 August 2025 11:20 Companies latest: Deliveroo, WPP, InterContinental Here's a quick wrap of the latest companies announcements and financials this morning: Deliveroo saw sales increase in the first half of the year with more people ordering takeaways, but the company swung to a loss even so. It is set for a takeover by DoorDash later this year in a £2.9bn deal. Advertising firm WPP has cut 7,000 jobs and saw profits drop from £338m a year ago to £98m this year as a tough year continues. Shares were down 2.7 per cent this morning and have dropped by more than half this year. And Holiday Inn's owner, InterContinental Hotels, said a key metric in revenue per available room has slowed - but overall pre-tax profits rose 13 per cent from last year. Karl Matchett7 August 2025 11:07 Mortgage market facing a reckoning as super-cheap deals come to an end Aside from the questions of inflation and economic growth, there's one additional big reason why lots of people hope for interest rate cuts, now and in the coming months. Many thousands of homeowners are set to see their five-year fixed term mortgage deals expire in the second half of 2025 - and given interest rates were 0.1 per cent for most of 2020, it's fair to say the increased payments they face will be a big shock to the system. One mortgage broker suggests the fall-out will dampen down house prices and many need to reassess their financial positions. Ranald Mitchell, from Charwin Mortgages, said: 'For many borrowers, 2025 will prove the hangover after the house party. Millions are waking up to find their cheap-as-chips pandemic mortgage deals have vanished, replaced with monthly payments that bite. "For five-year fixers coming off sub-2% rates, some are facing £300–£500 extra a month. It's not just a shock, it's a financial slap. This won't crash the market, but it will chill it. Potential movers may pause and reflect on their new monthly financials. The days of borrowing big and breezing through affordability checks are over.' Karl Matchett7 August 2025 10:40 FTSE 100 an outlier as global stock markets rise Across most global markets, shares were on the up overnight and today despite those tariffs coming into effect - the UK's FTSE 100 is very much an outlier there, as AJ Bell's Danni Hewson explains. 'The FTSE 100 is struggling to make meaningful progress this week, running to stand still as investors weigh the latest economic, geopolitical and corporate developments,' says Ms Hewson. 'Not helping today was several heavyweight names trading without the rights to their dividend. This held the index back despite gains on Wall Street and across Asia. Investors are largely greeting widespread tariffs taking effect with a shrug. 'The exception again was India, with the Trump administration ordering a big increase in tariffs to punish the country for buying and selling Russian oil.' Karl Matchett7 August 2025 10:20 UK not facing threat of stagflation - bank expert With economic growth still a struggle to find, you may hear the term 'stagflation' being used. That shouldn't the case, says one industry expert - it's not the situation the UK faces right now. Will Hobbs, from Barclays private bank and wealth management, said current indicators do not suggest the UK is any more at risk of that than previously. 'Given the current margins for error in the UK's economic dataset, it remains possible to tell almost any story you want on the UK's economic outlook. Our optimistic [view] rests in part [with] household balance sheet and rising real incomes, both of which provide a buffer against broader uncertainty. 'Of course, there are multiple factors to consider. We, like the consensus, expect the Bank of England to cut rates, likely following a fairly even vote split. 'We would resist overuse of the term 'stagflation' to describe the UK's position. The misery indices (unemployment plus inflation), looks unremarkable today relative to the experience of the last century.' Karl Matchett7 August 2025 10:00 How interest rates impact on your money, savings and bills If you have money in a savings account, it's the other side of the see-saw to mortgages: rates going down mean you'll earn less interest. As there's still a bit of a fierce battle raging among banks and building societies for customers, it's still possible to get good deals if you are happy to lock in money for a fixed period of time or contribute regular amounts, with several offering around 4.5 per cent or even more. There are always terms and conditions to be met, so ensure it suits your circumstances, but the opportunity remains there to save and earn money at a better rate than inflation, which currently sits around 3.5 per cent. Do be aware of the amount of interest you can earn without being taxed, though. If your savings account interest rate isn't fixed, banks can always change the rate you get up or down. A tax-efficient way of saving is to use a Cash ISA, where everyone has a £20,000 personal allowance each year. Credit card repayments and bank or car loans are of course also affected by interest rates, as the amount they all charge for borrowing will be altered. For credit card users, it's always ideal to pay off the full amount each month if you are able to, to avoid interest being charged at all - depending on your circumstance and the account type, they can be one of the more costly ways to borrow. Karl Matchett7 August 2025 09:40 What do interest rate cuts mean for mortgages? Broadly speaking, as increasing interest rates over the last few years have meant mortgage repayments going up, then the reverse should also hold true: lower rates, lower repayments. However, there are several important things to note. Firstly, that it's only the interest on the repayments which should change — your capital repayments will naturally decrease the more you pay off your mortgage. Secondly, the base rate isn't the rate you are necessarily charged by your bank or lender for the mortgage — they'll base theirs off the BoE rate but it doesn't have to be the same. More than half a million people do, however, have a mortgage which tracks the BoE interest rate and those will see an immediate change. Far more have fixed term deals which expire each year and need renegotiating. Additionally, if you've got a fixed term on a mortgage plan, you won't see a change in any case until that comes to an end. Karl Matchett7 August 2025 09:20
The Independent
19 minutes ago
- The Independent
WPP reveals around 4,000 roles cut in past six months as profits tumble
Global advertising giant WPP has cut its workforce by around 4,000 since the start of the year as profits plunged in a 'challenging' first half. The firm said the number of staff employed by the group dropped by 3.7% to 104,000 over the first six months of 2025. Job losses were largely focused on its WPP Media business while it also moved to reduce its workforce through natural staff turnover to cut costs in the face of tougher trading. Since June last year, the group has seen 7,000 roles go, although around 1,400 roles were stripped out with the sale of communications agency FGS Global in December last year. The group reported pre-tax profits tumbling to £98 million for the six months to June 30, down from £338 million a year earlier. WPP's outgoing chief executive Mark Read, who will be replaced by former Microsoft UK boss Cindy Rose on September 1, said: 'It has been a challenging first half given pressures on client spending and a slower new business environment. 'We have, however, made significant progress on the repositioning of WPP Media, simplifying its organisational model to increase effectiveness and reduce costs.' The group halved its interim dividend payout to 7p per share, saying it would allow 'our incoming CEO to review the group's strategy and capital allocation policy while maintaining financial flexibility'. 'The priority is to drive sustainable growth supported by an appropriate level of financial flexibility while balancing returns to shareholders,' he added. Shares, which have fallen to their lowest level in 16 years amid recent trading woes, fell another 2% in morning trading on Thursday. WPP – which owns agencies such as Ogilvy and VML – warned over annual profits in July as clients cut spending amid global economic uncertainty, with trading worsening over the second quarter. It saw revenues fall 7.8% in the first half, down 2.4% on a like-for-like basis, with the decline picking up pace to 5.8% in the second quarter. WPP said it continues to expect full-year results in line with the lowered guidance given in July. Mr Read is leaving after seven years at the helm and a three-decade career at WPP. His successor has worked at Microsoft for nine years, most recently as its chief operating officer for global enterprise. She was previously the president of the technology giant for Western Europe, and the chief executive of the UK business. Recruiting Ms Rose is seen as aligning with WPP's efforts to sharpen its focus on artificial intelligence (AI) and digital transformation, in a bid to keep up with rapidly evolving demands.
