The Department for Work and Pensions (DWP) has provided an update for individuals claiming disability benefits who may be entitled to substantial compensation. This compensation is aimed at those who previously received specific disability benefits like Employment and Support Allowance but lost disability premiums when transitioning to Universal Credit before January 2019.
Due to this transition, many individuals missed out on severe disability premium (SDP) and enhanced disability premium (EDP) payments. Legal firm Leigh Day challenged this income loss in court, highlighting that some individuals experienced a monthly payment decrease of up to £180.
In response, the DWP has agreed to compensate for the income loss, with estimates from Leigh Day suggesting potential compensation of over £5,000 per person. However, approximately 13,000 cases are still pending processing and clearance by the DWP.
In its recent annual report, the DWP acknowledged challenges in identifying and rectifying underpayments for individuals no longer actively claiming ESA due to data limitations. The DWP anticipates resolving the remaining cases by September, affecting an estimated 57,000 individuals and costing approximately £452 million in total.
Following a High Court challenge by Leigh Day, 275 claimants secured settlements ranging from £200 to £3,000 in damages. A DWP spokesperson emphasized the commitment to promptly identifying and compensating eligible claimants, addressing the need to prevent similar errors in the future.
Leigh Day solicitor Ryan Bradshaw expressed satisfaction in settling the claim for affected clients but highlighted the thousands more who endured financial losses and stress due to the benefit transition. The ongoing migration of individuals from legacy benefits to Universal Credit includes benefits such as Housing Benefit, Income-related Employment and Support Allowance, Income-based Jobseeker’s Allowance, Child Tax Credit, Working Tax Credit, and Income Support.