DWP warned 'questions need to be answered' over £452million compensation payouts
Lawyers who successfully campaigned for the Department for Work and Pensions (DWP) to establish a compensation scheme for tens of thousands of benefit claimants are now demanding clarity on issues surrounding the pay-outs.
The DWP launched the scheme earlier this year for disabled individuals who were transitioned from "legacy benefits" such as Employment and Support Allowance (ESA) to Universal Credit before transitional protections were put in place.
These claimants were found to have lost their 'Severe Disability Premium' (SDP) during the transition, with the DWP failing to adequately protect their incomes. It comes as DWP confirms new Winter Fuel Payment deadline with pensioners urged to act now.
Leigh Day lawyers, who brought the cases forward, are now urging the DWP to disclose exactly how they are calculating the payments, citing several instances where claimants' pay-outs may not be "legally correct".
Ryan Bradshaw, a lawyer at Leigh Day who fought the cases, also points out "scandalous" instances where the DWP has informed claimants that the compensation payments would push their bank balances into the sums at which benefits would be reduced.
Estimating that compensation could exceed £5,000 per person, the DWP has confirmed that the total cost of the repayment exercise is £452million, reports The Independent.
The majority of the 57,000 individuals affected by the issue have now received their compensation, however, the department recently confirmed it is working to clear approximately 13,000 more complex cases by September.
While agents are actively reaching out to those eligible for compensation, anyone who believes they may have been affected is encouraged to make a claim. The DWP stated that it will assess claims on a case-by-case basis based on the evidence provided.
Ryan Bradshaw commented: "While we welcome the announcement of back payments, there are questions that need to be answered. There needs to be an agreed lawful calculation method in place which can be easily checked by benefits claimants who have missed out [from] up to £180 a month before 2019."
A spokesperson for the DWP said: "We are fully committed to identifying and paying eligible claimants who have already moved to Universal Credit following a change in their circumstances. This is a complex undertaking and the majority of claimants affected by the court judgment have now been paid, and work is ongoing to pay all other eligible claimants as soon as possible."
Full eligibility explained
To qualify 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 removed.
Before their transition to Universal Credit, claimants must have met one of three additional conditions:
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).
There are five potential payment rates, which will be applied for each month between the claimant's switch to Universal Credit and when new income protection regulations were introduced in February 2024.
These back payments will be based on what claimants would have been entitled to had the new rules been in place when they transitioned.
The monthly rates are as follows:
For a single person with the Enhanced Disability Premium – £84.
For a couple claim with the Enhanced Disability Premium – £120.
For a single person with the Disability Premium – £172.
For a couple claim with the Disability Premium – £246.
For a disabled child – £177 per eligible child.
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