DWP issues new update for benefit claimants owed £1,000s in compensation

The Department for Work and Pensions (DWP) has issued an update for disability benefit claimants who could be owed thousands of pounds in compensation.

The payments are being issued to people who received certain disability benefits such as Employment and Support Allowance, who lost disability premiums after they were moved to Universal Credit before January 2019.

As a result, some people lost out on severe disability premium (SDP) and enhanced disability premium (EDP). Law firm Leigh Day challenged this loss of income in court and argued that some people saw their payments drop by up to £180 a month.

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The DWP agreed to compensate for the loss of income, which Leigh Day estimates could be worth in excess of £5,000 per person. However, the DWP has now confirmed around 13,000 cases are yet to be processed and cleared.

In its annual report published earlier this month, it said: "Unfortunately, some underpayments may be owed to customers who no longer have an active ESA claim and restrictions in data make it difficult to identify, assess and correct these errors."

The DWP said it expects the remaining cases will be resolved by September. It is estimated that 57,000 people were affected by the issue and the total cost of the repayment exercise is expected to be £452million.

Leigh Day secured a settlement for 275 claimants following its High Court challenge and these people were awarded between £200 and £3,000 in a damages.

A DWP spokesperson told the Independent: “We are fully committed to identifying claimants that are owed arrears and providing the financial support to which they are entitled as quickly as possible, with the majority of these cases having already been resolved.

"We are clear that errors like this one should not happen and have already taken action to avoid future errors.”

In a statement issued earlier this year, Leigh Day solicitor Ryan Bradshaw said: “I am glad to have settled this claim on behalf of my clients. However, there are thousands of others who have been similarly affected who have not been in a position to bring a claim like this.

“They too will have experienced the loss of £180 a month after they were moved from legacy benefits on to universal credit in the years before January 2019. They too will have suffered unnecessary stress.“

It comes as the DWP is finishing moving everyone on legacy benefits to Universal Credit. The benefits being replaced by Universal Credit are: Housing Benefit, Income-related Employment and Support Allowance, Income-based Jobseeker's Allowance, Child Tax Credit, Working Tax Credit and Income Support.