The Department for Work and Pensions (DWP) is working to finalise compensation payments to thousands of disabled people who lost out on vital income when moving from legacy benefits to Universal Credit. Affected claimants lost access to key disability premiums—money they were entitled to—through no fault of their own.
Who is owed money and why?
This issue affects disabled claimants who previously received the Severe Disability Premium (SDP) and, in some cases, the Enhanced Disability Premium (EDP) under the old benefits system. When these individuals were switched over to Universal Credit (UC), their additional disability income vanished—resulting in monthly losses of up to £180 for some.
How did this happen?
Before the SDP Gateway was introduced to prevent future claimants from losing out, thousands were transferred to UC without protection for these premiums. The error was exposed after two disabled claimants (known legally as TP and AR) took the government to court, represented by Leigh Day solicitors. The High Court ruled the government had failed to protect the incomes of vulnerable claimants.
Compensation Progress Update – July 2025
The DWP has confirmed that most of the 57,000 affected claimants have now received compensation, but around 13,000 complex cases remain unresolved. These remaining payments are due to be processed by September 2025.
The total cost of the repayment project is expected to reach £452 million, with individual payouts potentially exceeding £5,000 depending on how long the claimant went without the premiums.
What is the Severe Disability Premium (SDP)?
The SDP was an extra payment given to those receiving certain disability benefits if they lived alone and no one claimed Carer’s Allowance for looking after them. Losing this support often left people financially vulnerable.
🛑 What is the Enhanced Disability Premium (EDP)?
The EDP was an additional payment for disabled people with severe needs, usually tied to qualifying for higher rates of disability benefits such as PIP or DLA.
What Should You Do If You’re Affected?
✅ If You’ve Not Been Paid Yet:
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The DWP is working through the remaining cases.
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You don’t need to reapply—they will contact you.
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Check your benefit statements and contact the DWP if you believe your case has been overlooked.
✅ If You’ve Already Been Paid:
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No further action is needed unless you believe you were underpaid.
FAQs – DWP Disability Premium Compensation 2025
1️⃣ Why are these compensation payments being made?
The government failed to protect the incomes of disabled people when moving them to Universal Credit, resulting in the loss of Severe Disability Premiums (SDP) and Enhanced Disability Premiums (EDP). After a legal challenge, the DWP agreed to repay those affected.
2️⃣ How much could I receive?
Payments vary depending on how long you went without the premiums, but some individuals are receiving over £5,000 in back payments.
3️⃣ When will all payments be completed?
The DWP has set a deadline of September 2025 to complete the remaining 13,000 complex cases. Most affected claimants have already been paid.
4️⃣ Do I need to apply?
No. If you were affected, the DWP should contact you automatically. However, if you’re unsure, it’s worth contacting the DWP or Citizens Advice.
5️⃣ Can I claim compensation if I wasn’t part of this issue but had other problems switching to UC?
This specific repayment is only for those who lost SDP or EDP moving from legacy benefits to Universal Credit. Other issues may require separate action through mandatory reconsiderations or appeals.
Final Thought: Don’t Miss Out on What You’re Owed
If you believe you’re one of the remaining 13,000 waiting for payment, stay proactive. While the DWP is contacting claimants directly, checking your Universal Credit statements and reaching out for advice could help speed things up or ensure you aren’t overlooked.
This case highlights the importance of knowing your rights, challenging unfair treatment, and staying informed about changes to benefits. Legal action made this compensation happen—don’t let your entitlement slip through the cracks.
