The Department for Work and Pensions (DWP) has announced a compensation scheme of up to £5,000 for certain Universal Credit (UC) claimants who lost income when transitioning from older benefits. Many claimants experienced financial loss because disability-related premiums, such as the Severe Disability Premium (SDP) or Enhanced Disability Premium (EDP), were not fully protected during the move to Universal Credit.
This compensation is designed to backdate payments and provide financial redress to those affected.
Background Of The Compensation Scheme
Claimants who moved from legacy benefits like Employment and Support Allowance (ESA) or Jobseeker’s Allowance (JSA) to Universal Credit before 2019 often lost parts of their income.
These losses mainly involved SDP or EDP payments, which were intended to support people with disabilities. The DWP recognized that these claimants were disadvantaged and introduced a compensation program to correct these financial losses.
Many claimants lost approximately £180 per month due to the removal of these premiums. The compensation program is aimed at providing full back payments plus a lump sum to cover the loss.
Who Is Eligible
To qualify for the £5,000 compensation, claimants must meet specific criteria:
- Must have moved from a legacy benefit to Universal Credit before transitional protections were fully implemented in 2019.
- Must have been entitled to SDP, EDP, Disability Premium, or Disabled Child Premium on the legacy benefit.
- Must have experienced a loss of income due to the removal of these premiums when starting Universal Credit.
- Both current Universal Credit claimants and those who previously received UC may be eligible, provided evidence of loss is available.
Compensation Amounts
The compensation varies depending on the length of time the claimant lost income and the amount lost. Most claimants are expected to receive up to £5,000, though some may receive lower amounts if they had partial protections or received previous payments.
The compensation covers both back payments from the date of transition and any other financial losses caused by the move.
Compensation Details – Quick Reference
| Category | Details |
|---|---|
| Maximum Payment | £5,000 per claimant |
| Typical Monthly Loss Covered | Approx. £180 |
| Types Of Lost Premiums | SDP, EDP, Disability Premium, Disabled Child Premium |
| Estimated Number Of Eligible Claimants | Over 15,000 |
| Payment Deadline | Targeted by August 2025 |
| Backdated Payment Period | From UC transition date until protections applied |
How To Apply For The Compensation
Most eligible claimants will be contacted automatically by the DWP. However, if you have not received notification, you can follow these steps:
- Check Your Eligibility
Review your benefits history to confirm whether you received SDP, EDP, or similar premiums before moving to Universal Credit. - Gather Evidence
Collect documents such as legacy benefit award letters, Universal Credit statements, and any other paperwork showing lost income. - Check Your Universal Credit Account
Log in to your account and review any messages or notifications regarding compensation. - Contact DWP If Needed
If you believe you are eligible but have not been contacted, reach out to your work coach or call the Universal Credit helpline. - Seek Professional Advice For Complex Cases
Claimants with complicated histories may benefit from welfare advisers or legal support to ensure they receive the full compensation.
Important Deadlines
The DWP has stated that most payments will be completed by August 2025, though some complex cases may take longer. Acting promptly and providing clear evidence will help ensure compensation is processed quickly.
The DWP £5,000 compensation scheme offers a significant opportunity for Universal Credit claimants who lost income due to the removal of disability premiums. Claimants should check their eligibility, gather necessary documents, and contact the DWP if they have not received notification.
This compensation ensures that claimants receive the financial support they were entitled to and provides back payments for lost income.
FAQs
Who is eligible for the £5,000 DWP compensation?
Anyone who moved from a legacy benefit to Universal Credit before protections were introduced and lost disability-related premiums may qualify.
Do I need to apply manually?
Most eligible claimants will be contacted automatically, but if not, you should check your account and contact the DWP.
How much compensation will I receive?
Compensation depends on individual circumstances, but eligible claimants can receive up to £5,000.