In a significant move to address long-standing benefit issues, the Department for Work and Pensions (DWP) has confirmed a £5,000 compensation payment for thousands of Universal Credit claimants who lost vital disability-related payments.
If you switched from legacy benefits and lost out on Severe Disability Premium (SDP) or Enhanced Disability Premium (EDP), you may be entitled to this payment.
Let’s explore who qualifies, how the payments work, and what steps you need to take.
Why Is the DWP Paying £5,000 Compensation?
The DWP faced numerous legal challenges and was found to have discriminated against certain claimants who transitioned from ESA, Income Support, or JSA to Universal Credit between 2011 and 2019.
Many of these individuals lost disability premiums overnight, significantly reducing their income—sometimes by over £200 per month.
This new compensation scheme aims to repay what was lost and restore justice to affected claimants.
Quick Overview of the Compensation Scheme
| Detail | Information |
|---|---|
| Payment Amount | Up to £5,000 based on monthly losses |
| Who Qualifies | Those who lost SDP or EDP when moving to Universal Credit |
| Application Required? | No, DWP will contact eligible claimants directly |
| Timeline | March–August 2025 depending on when you transitioned |
| People Affected | Over 57,000 claimants across the UK |
Eligibility Criteria for the £5,000 Compensation
You may be eligible if you:
- Were receiving Severe or Enhanced Disability Premium before moving to Universal Credit
- Transitioned to Universal Credit before January 16, 2019
- Lost income due to the move and did not receive transitional protection
- Are either a current or former UC claimant
This applies to individuals and couples. Families with a disabled child may also receive compensation under this scheme.
How Much Will You Receive?
The exact amount depends on your previous entitlements and how long you went without them. Here’s a breakdown of the estimated monthly losses:
| Premium Type | Monthly Loss |
|---|---|
| Enhanced (Single) | £84 |
| Enhanced (Couple) | £120 |
| Severe (Single) | £172 |
| Severe (Couple) | £246 |
| Disabled Child Premium | £177 per child |
Depending on the length of loss, many claimants will receive £3,000 to £5,000 or more in backdated payments.
Payment Timeline by Group
The compensation rollout is being phased in:
| Claimant Group | Payment Schedule |
|---|---|
| UC claimants moved post-2020 | By August 2025 |
| UC claimants moved between 2018–2020 | Payments began March 2025 |
| Former claimants (pre-2018) | Expected late 2025 |
You will receive a letter from the DWP with full details if you are included.
How to Prepare (Even Without Applying)
You don’t need to fill out an application form, but being prepared helps prevent delays:
- Keep records: Save past benefit letters and payment statements
- Update contact info: Make sure the DWP has your correct phone and address
- Watch your mail: Letters will be sent in phases
- Get help: Contact Citizens Advice if unsure
- Avoid scams: DWP will not ask for your bank details via text or email
The £5,000 DWP compensation scheme is a long-overdue effort to fix a serious injustice for thousands of disabled benefit claimants. With no application required and payments automatically calculated, this is your chance to reclaim support you may have been unfairly denied.
Make sure your records and contact information are up to date, stay vigilant for your official letter, and get support if needed. This is money you deserve—don’t miss it.
FAQs
Who qualifies for the £5,000 Universal Credit compensation?
Anyone who lost SDP or EDP payments when switching from legacy benefits to Universal Credit before January 2019 and didn’t get transitional protection.
Do I need to apply to get the compensation?
No, the DWP will automatically identify and contact eligible individuals.
When will I receive my payment?
Payments are being made between March and August 2025, depending on your transition date and claimant group.