DWP to provide payouts of up to £5,000 to thousands of benefits claimants
The Department for Work and Pensions (DWP) has announced that a significant number of benefit claimants will be receiving compensation of up to £5,000 each. It is estimated that around 57,000 individuals are due to receive payments, with the DWP aiming to complete the process by August this year. The compensation comes as a result of ongoing court cases that found that many claimants lost ‘severe disability premiums’ (SDP) when transitioning from ‘legacy benefits’ to universal credit in recent years.
This compensation scheme is the outcome of two High Court rulings in 2018 and 2019, which highlighted the failure of the government to safeguard the incomes of these claimants during the transition period. Despite the DWP’s attempt to challenge these rulings at the Court of Appeal in 2020, the decisions were upheld. The monthly income loss for affected individuals was approximately £180 in both cases. Legal firm Leigh Day, representing the claimants, estimates that the compensation could exceed £5,000 per person.
Neil Couling, the senior responsible owner for universal credit at the DWP, confirmed the details of the payment scheme. He outlined three groups of people who are eligible for compensation: those due an additional amount of transitional SDP element for 2020 onwards and still receiving universal credit, those due an additional amount for the period between 2018 and 2020 and continuing to receive universal credit, and those due an additional amount from 2018 onwards but no longer on universal credit.
Of these groups, it is expected that the first group of around 35,000 individuals will receive their payments first, as their cases can be processed automatically using digital systems. The second group consists of 15,000 people, and the third group comprises 7,000 individuals with more complex records that require a tailored solution. The compensation scheme was initiated following a High Court case settled by the DWP after a legal challenge by Leigh Day on behalf of 275 claimants. Each claimant in this initial case was awarded between £200 and £3,000 in damages.
The compensatory payouts to the affected claimants highlight the importance of ensuring that vulnerable individuals are adequately supported during transitions in the welfare system. The acknowledgment by the DWP of the oversight in safeguarding claimants’ incomes demonstrates a commitment to rectifying past errors and providing much-needed financial support to those affected. As the compensation scheme is rolled out in the coming months, it is crucial for the department to efficiently address the varying needs of claimants to ensure a smooth and fair distribution of payments.
The DWP’s efforts to rectify the situation and provide compensation to those affected by the loss of SDP during the transition to universal credit are commendable. The acknowledgment of the court rulings and the commitment to implementing the judgements reflect a step towards accountability and justice for the affected claimants. As the compensation scheme progresses, it is essential for the DWP to maintain transparency and communication with claimants to ensure that the process is conducted with diligence and fairness. By providing financial redress to those impacted, the DWP is taking a proactive stance in addressing past shortcomings and upholding the welfare of vulnerable individuals within the benefits system.
The provision of compensation to thousands of benefits claimants underscores the significance of upholding the rights and financial security of individuals within the welfare system. The DWP’s confirmation of payments of up to £5,000 serves as a crucial step towards rectifying past errors and providing much-needed support to those who experienced financial losses during the transition to universal credit. As the compensation scheme unfolds, it is essential for the DWP to ensure that all eligible claimants receive their rightful payments in a timely and efficient manner, in line with the court rulings and commitments made by the department.