Thousands of people on Universal Credit could be owed up to £5,000 from the Department for Work and Pensions (DWP). If you lost disability-related payments when switching from legacy benefits, this guide is for you.
The DWP has announced a large-scale compensation scheme aimed at fixing what many consider one of the biggest benefit injustices in recent years.
Here’s everything you need to know—who’s eligible, how much you could get, when to expect it, and how to stay prepared.
Overview
Let’s break it down quickly. This is a compensation payment designed to repay people who lost money during the move from older benefits to Universal Credit.
Specifically, it affects those who were receiving Severe Disability Premium (SDP) or Enhanced Disability Premium (EDP) and then had those payments cut off when they moved to Universal Credit.
| Detail | Info |
|---|---|
| What is it? | Payment up to £5,000 for lost disability premiums |
| Who qualifies? | People who lost SDP or EDP during transition to UC |
| How to apply? | No application needed; DWP contacts you directly |
| Timeline | March–August 2025 |
| People affected | Over 57,000 across the UK |
This move follows multiple court rulings that found the DWP’s actions discriminatory and unlawful, forcing them to make it right.
Background
Between 2011 and 2019, claimants on legacy benefits like ESA, Income Support, or JSA were eligible for disability premiums. These payments helped disabled people meet extra costs like care needs and mobility. But when Universal Credit came along, many people lost these additional payments overnight.
In many cases, people lost over £200 a month. And this wasn’t a one-time issue—it added up to thousands over several years.
After successful legal challenges, the DWP agreed to offer compensation to those who were short-changed. This guide explains how it works.
Eligibility
To qualify for the DWP £5,000 compensation payment, you must meet these criteria:
- You received a Severe or Enhanced Disability Premium before moving to Universal Credit
- You moved to Universal Credit before January 16, 2019
- You lost income due to the transition
- You didn’t receive proper transitional protection
Examples
Jane was on ESA and getting the Severe Disability Premium. She moved to Universal Credit in 2018 and lost £172 a month. She’s now due compensation for those missed payments.
Daniel and his partner switched from legacy benefits in 2017 and lost £120 per month. They’re eligible for backdated payments under this scheme.
Payouts
How much you’ll get depends on what you lost and how long the gap lasted.
| Premium Type | Monthly Loss |
|---|---|
| Enhanced (Single) | £84/month |
| Enhanced (Couple) | £120/month |
| Severe (Single) | £172/month |
| Severe (Couple) | £246/month |
| Disabled Child Premium | £177/month per child |
In many cases, the compensation adds up to £3,000–£5,000 or more, depending on your situation.
The DWP will calculate each payment based on their records, so amounts will vary. No two claims will look exactly the same.
Timeline
No need to apply—the DWP is taking the lead. But the rollout will happen in stages:
- 35,000 current UC claimants (moved post-2020): Paid by August 2025
- 15,000 claimants (moved between 2018–2020): Payments began in March 2025
- 7,000 former claimants: More complex, payments expected later in 2025
If you’re eligible, you’ll receive a letter explaining the amount and when to expect it.
Steps
You don’t need to do much—but a little preparation goes a long way.
- Keep old benefit paperwork
Hold on to letters and statements. They may help if there’s a discrepancy in DWP’s records. - Update your contact info
Make sure the DWP has your current phone number and address. - Watch your mail
Letters are being sent in batches, so keep an eye out for official communication. - Get free advice
Contact Citizens Advice or a local welfare rights service if you’re unsure about anything. - Watch for scams
The DWP will never text or email you asking for bank info. Stay alert and report anything suspicious.
This is a rare opportunity to get reimbursed for years of lost support. Make sure you’re ready when your name comes up.
FAQs
Who qualifies for the £5,000 payment?
Anyone who lost SDP or EDP when moving to Universal Credit early.
Do I need to apply for compensation?
No, DWP will contact you automatically if you qualify.
When will I receive my payment?
Between March and August 2025, depending on your case.
What if I haven’t heard anything yet?
Contact DWP or get advice if you’ve had no letter by end of 2025.
Can I still qualify if I’m off Universal Credit?
Yes, former claimants may still be eligible, but it may take longer.
