Lawyers call for answers over DWP compensation payment calculation

Leigh Day human rights team partner Ryan Bradshaw says there is no agreed calculation method in place for the DWP to compensate up to 13,000 claimants who could be entitled to thousands of pounds. 

The DWP set up its compensation scheme to make up for losses of Severe Disability Premiums (SDP) for claimants who were moved on to universal credit before 2019 after the High Court ruled that its failure to address the benefits shortfalls was unlawful. 

Ryan achieved individual settlements of up to £3,000 for 275 benefits claimants who experienced a sudden drop in income of around £180 a month after being moved on to universal credit before January 2019. The settlement was to compensate for stress and injury to feelings they had suffered, with compensation to make up for the lost payments to be paid separately and by no later than August 2025 for all those who had missed out on both SDP and the Enhanced Disability Premium (EDP). 

Now Ryan is calling for complete transparency in the way the DWP is calculating the payments. He is concerned that the payments are being made without taking into account recent Upper Tribunal judgments that have indicated that payments ought not be reduced by a mechanism the DWP refers to as ‘erosion’.  

It appears that the DWP has begun making payments to the claimants, which may not be legally correct. 

What’s more, in some instances the DWP has informed claimants that the compensation payments being made of £6,000 would push bank balances into the sums at which benefits would be cut. Ryan’s team have contacted government lawyers to remind them to advise universal credit advisors that compensation payments should not lead to reductions in benefits and of their obligations to disabled people more generally. 

Ryan Bradshaw said: 

“While we welcome the announcement of back payments, there are questions that need to be answered. There needs to be an agreed lawful calculation method in place which can be easily checked by benefits claimants who have missed out to the tune of up to £180 a month before 2019. 

“It is regrettable that the DWP has pressed ahead with making compensation payments without notice to us in circumstances where our legitimate concerns are yet to be addressed. It is scandalous that they are then, in some cases, using the existence of these compensation payments as a pretext to try and further reduce the already minimal amounts paid to disabled people under universal credit.”