Claim Your £5,000 DWP Compensation on Universal Credit – Here’s How to Apply

If you lost key disability premiums when you switched to Universal Credit before 2019, you could be owed up to £5,000. The Department for Work and Pensions (DWP) is now compensating thousands of people who unfairly lost income during the transition from older, so-called “legacy” benefits. While many people will be contacted automatically, others may need to take the initiative.

Here’s a closer look at who’s eligible, how to check your status, and what to do to make sure you don’t miss out.

Background

The issue began when Universal Credit replaced six existing benefits. As part of that change, many people receiving disability-related premiums—such as the Severe Disability Premium (SDP) or the Enhanced Disability Premium (EDP)—found that those payments were removed. For some, this meant losing hundreds of pounds every month.

After legal challenges led by disability rights groups, the courts ruled that the changes were discriminatory. In response, the DWP created a compensation scheme to address the income loss for those affected.

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Eligibility

Not every Universal Credit claimant will qualify. This compensation is meant for a specific group of people who moved over too early and lost out.

You may be eligible if:

• You were previously on legacy benefits such as ESA, JSA, or Income Support.
• You received disability premiums like SDP, EDP, or the Disabled Child Premium.
• You switched to Universal Credit before January 2019.
• You saw a drop in income after losing those premiums.

If you moved under “managed migration” after protections were put in place, or if your switch occurred after January 2019, you probably won’t be eligible.

Payouts

The DWP isn’t issuing a flat-rate payment. The amount depends on several factors:

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• How long you went without the premiums.
• What type and how much premium support you lost.
• Whether you faced financial hardship as a result.

Some people will receive the full £5,000, while others may get a lower amount. You’ll be given a full explanation of how your payment was calculated.

Here’s a quick summary:

Process

Most people won’t have to fill out any forms. The DWP says it’s identifying eligible claimants and reaching out directly.

However, if you haven’t heard anything and believe you qualify, you should:

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• Call the Universal Credit helpline: 0800 328 5644
• Have your National Insurance number ready.
• Find your old benefit letters that show you received SDP or EDP.
• Reach out to Citizens Advice or a welfare rights group for help. They can guide you through the process and help build your case.

Timeline

The DWP has started issuing payments and plans to complete the process by August 2025. If you qualify, you’ll receive:

• A confirmation letter explaining your case.
• A breakdown of how your compensation was calculated.
• A direct payment into your bank account.

So keep an eye on your mailbox—and your bank account.

Extras

Aside from this one-time payment, there are other forms of help available if you’re finding it tough to make ends meet on Universal Credit:

• Budgeting Advances for major expenses
• Discretionary Housing Payments if your rent isn’t fully covered
• Council Tax Reduction schemes through local councils
• Food bank support via Citizens Advice or your GP

Disputes

If you believe your case was handled incorrectly, there are steps you can take:

• Ask for a Mandatory Reconsideration.
• File a formal complaint using the DWP’s process.
• Appeal to a tribunal if needed.

It might help to get legal advice or speak with a benefits adviser to support your case.

This compensation won’t undo the hardship many have faced, but it can go some way toward making things right. Don’t wait for the DWP to figure it out—check your records and take action if you think you’ve been missed.

FAQs