Big News: Thousands Set to Get Money Back from DWP

The Department for Work and Pensions (DWP) has provided a key update regarding its compensation scheme for thousands of benefit claimants. Following a series of legal battles, around 57,000 people will receive payments averaging £2,100 each in 2025. These payments are meant to compensate individuals who lost out on Severe Disability Premiums (SDP) when transitioning from legacy benefits to Universal Credit.

DWP officials initially planned to complete the scheme by August 2024, but a recent update from Neil Couling, senior responsible owner for Universal Credit, has clarified new timelines. Here’s everything you need to know about who qualifies, when payments will be made, and what this means for claimants.

Why Is DWP Paying Compensation?

This compensation scheme follows two High Court rulings (2018 and 2019), which found that the government failed to protect the incomes of disabled claimants moving to Universal Credit. The court determined that:

• Some individuals lost about £180 per month due to changes in their benefits.
• The DWP’s transitional protection was insufficient, leading to unfair financial losses.
• A Court of Appeal challenge by the DWP in 2020 failed, confirming the government’s responsibility to compensate affected individuals.

Law firm Leigh Day, which represented claimants, estimates that some individuals could receive more than £5,000 in compensation.

Who Will Receive Compensation?

DWP has identified three groups of people eligible for payments:

1. People receiving Universal Credit and due extra payments from 2020 onwards – Around 35,000 people fall into this category.
2. People due additional compensation for the period between 2018 and 2020, and still receiving Universal Credit – Approximately 15,000 individuals.
3. People who were affected from 2018 onwards but no longer receive Universal Credit – Around 7,000 claimants.

When Will Payments Be Made?

Neil Couling provided the following timeline for when different groups can expect payments:

• First group (35,000 people): Payments will be completed by August 2025, with 4,110 payments already made.
• Second group (15,000 people): Payments will begin by March 2025 and should also be completed by August 2025.
• Third group (7,000 people): No fixed deadline has been set yet. These cases are more complex as they involve people who no longer claim Universal Credit. The DWP is still analyzing how to process these payments.

What Does This Mean for Claimants?

This update offers clarity for thousands of people waiting for compensation, but there are still concerns about delays—especially for the third group. Many affected individuals have already faced financial hardship due to their loss of Severe Disability Premiums.

Leigh Day lawyer Ryan Bradshaw criticized the delay, stating:

“Six years after our first case, the DWP is still making severely disabled people wait for proper compensation. Universal Credit has left many disabled people worse off, and the government must ensure disability premiums are maintained in full.”

Many campaigners believe that instead of temporary compensation, the government should permanently reinstate lost disability benefits to ensure long-term financial stability for claimants.

The DWP’s compensation scheme aims to correct past errors that left thousands of disabled people worse off after switching to Universal Credit. While the government has committed to making payments by August 2025, delays for some claimants remain a concern. If you believe you are eligible for compensation, it’s important to stay updated on the process and ensure your details are correct with the DWP.

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