Lawyers flag ‘scandalous' issues as DWP pays out £452 million in compensation
The DWP set up the scheme earlier this year for 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.
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.
Lawyers from Leigh Day – who brought the cases – are now calling for the DWP to reveal exactly how they are calculating the payments, as they note several instances where claimants payouts may not be 'legally correct.'
The law firm's Ryan Bradshaw, who fought the cases, also highlights 'scandalous' cases where the DWP has told claimants that the compensation payments would push bank balances into the sums at which benefits would be cut.
The lawyer estimates that compensation could be worth more than £5,000 per person, and the DWP has confirmed that the total cost of the repayment exercise is £452m.
Most of the 57,000 people affected by the issue have now received their compensation. However, the department recently confirmed it is working to clear approximately 13,000 cases which are more complex by September.
While agents are proactively contacting those eligible for compensation, anyone who thinks they may have been affected to make a claim. The DWP said it will assess claims on a case-by-case basis based on the evidence given.
Ryan Bradshaw said: '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 to the tune of up to £180 a month before 2019.
'It is regrettable that the DWP has pressed ahead with making compensation payments without notice to us in circumstances where our legitimate concerns are yet to be addressed.'
A DWP spokesperson 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.'
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:
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