DWP to Issue Payouts to 57,000 Benefit Claimants Following Landmark Court Ruling

The Department for Work and Pensions (DWP) has confirmed that 57,000 benefit claimants across the UK will receive compensation payments following a series of legal rulings related to the transition from legacy benefits to Universal Credit.

The move comes after the High Court found that the DWP’s handling of the transition was unlawful, particularly for disabled claimants who lost crucial Severe Disability Premiums (SDP) and Enhanced Disability Premiums (EDP) during the switch.

The compensation payments, which could be as high as £5,000 per claimant, aim to rectify financial hardships caused by the transition. The DWP has stated that payments will be processed over the coming months, with full disbursement expected by August 2025.

What Led to the Compensation Payouts?

The dispute began when claimants who were receiving SDP and EDP as part of legacy benefits were migrated to Universal Credit. Many experienced a significant reduction in their monthly payments, which left some struggling financially.

A series of legal challenges in 2018 and 2019 argued that the DWP failed to protect these vulnerable claimants, leading to severe financial hardship.

In 2022, the High Court ruled that the policy was discriminatory, forcing the government to introduce transitional protections. However, legal action continued as claimants argued they were still unfairly treated.

The court ruled in favor of the claimants, stating that the DWP’s handling of the transition was unlawful, leading to the latest compensation package.

Who Will Receive Compensation?

The DWP has categorized claimants into three main groups, based on when they were transferred to Universal Credit:

1. Those who moved after 2020:
   • Approximately 35,000 people fall into this category.
   • They will automatically receive backdated payments through the digital system.
2. Those who moved between 2018 and 2020:
   • Around 15,000 claimants.
   • Payments require a mix of digital and manual processing.
3. Former claimants who no longer receive Universal Credit:
   • Roughly 7,000 people.
   • They are entitled to compensation for the period they were affected but will need to apply manually.

The DWP has advised claimants to check their eligibility and ensure that their contact details are up to date with Universal Credit.

How Much Will Claimants Receive?

The compensation amounts will vary, depending on the financial losses suffered. Some claimants could receive up to £5,000 in back payments. The payments are calculated based on:

• The difference between previous benefit payments and Universal Credit entitlements.
• The length of time affected by the transition.
• Any additional hardship documented by the claimant.

If you believe you are owed compensation, you can contact the DWP helpline or visit Citizens Advice for assistance.

Legal Impact and Government Response

This ruling has been seen as a major legal setback for the DWP, which has faced criticism over its handling of the Universal Credit transition. Advocacy groups, including Disability Rights UK, have welcomed the decision but argue that more needs to be done to prevent similar issues in the future.

Ryan Bradshaw, a lawyer representing affected claimants, stated:

“This ruling is a victory for thousands of disabled people who suffered financial hardship because of an unfair system. The government must ensure that future welfare reforms do not disproportionately harm vulnerable individuals.”

The DWP has acknowledged the ruling and has pledged to process payments as quickly as possible. However, some campaigners argue that this is only a partial solution, as Universal Credit still lacks the disability premiums found in the old system.

What Should Claimants Do Next?

If you believe you are eligible for a compensation payment, follow these steps:

1. Check Your Universal Credit Account: Log in to your Universal Credit account to see if you have been notified about a pending payment.
2. Ensure Your Contact Details Are Updated: If you are no longer receiving benefits, update your contact details with the DWP.
3. Seek Advice: Contact Citizens Advice or Turn2Us for free guidance.
4. Report Any Delays or Issues: If you experience problems receiving your payment, you can raise a formal complaint through the DWP complaints system.

Conclusion

The DWP’s decision to compensate 57,000 benefit claimants marks a significant victory for disabled individuals who were negatively impacted by the Universal Credit transition.

While these payments offer some financial relief, campaigners continue to push for long-term reforms to ensure fairness in the welfare system.

For further updates, visit the UK Government’s Benefits Page or follow major news outlets covering welfare reforms.

This article has been carefully fact-checked by our editorial team to ensure accuracy and eliminate any misleading information. We are committed to maintaining the highest standards of integrity in our content.