Thousands on Universal Credit could get £720 compensation after move from benefits left them worse off
THOUSANDS of people on Universal Credit could get a share of £150million in compensation after moving from legacy benefits.
Over 50,000 of those who’ve transitioned to Universal Credit are losing out on payments worth £720 a year on average.
A legal battle revealed that many of those who transitioned from disability premiums to Universal Credit are those that have been left out of pocket.
It comes after the court said that two severely disabled men were discriminated against by the Department for Work and Pensions last year.
The pair who were transitioned from receiving disability premiums to Universal Credit were left £180 a month out of pocket.
Both received severe disability premium (SDP) and enhanced disability premium (EDP) payments worth £178 a month prior to being transferred to UC in 2016 and 2017.
Disability premiums are extra amounts of money added to other benefits including income support, jobseeker’s allowance, and housing benefit.
But the pair were automatically shifted onto UC after moving houses because the DWP considers this a change of circumstances.
This is because Universal Credit is replacing legacy benefits and thousands of people have already been switched before the deadline of 2028.
Even though the pair were reassured by the DWP that they would receive the same amount, they found that they were £178 a month worse off.
They challenged the case in the high court in 2018 but the DWP only offered them £120 a month in compensation.
But they returned to the High Court last month which ruled in their favour.
With the backing of their solicitor, the pair have now written to the government asking them to set out how thousands of others will be compensated.
The claimant’s solicitor Tessa Gregory said: “The Court of Appeal’s latest ruling means the secretary of state has now exhausted all legal avenues open to her.
“She must take steps to remove the discrimination identified without delay by adopting provisions which reflect the actual loss severely disabled benefit claimants like our clients have suffered.”
It’s unclear how and if all 55,000 will be compensation and we’ve asked the DWP for its response.
What’s happening to legacy benefits?
Thousands of households on legacy benefits face being moved on to Universal Credit by 2028.
Managed migration is the process of moving people over to Universal Credit.
Everyone on five so-called legacy benefits will be moved over to Universal Credit by the end of 2024. This includes those on:
- Working tax credit
- Child tax credit
- Income-based jobseeker’s allowance
- Income support
And those on income-related employment and support allowance will be moved over by 2028.
Households on legacy benefits can also be moved over to Universal Credit due to a change in circumstances – which are listed on the government website.
Will I be better off on Universal Credit?
It’s estimated that 1.4million will be better off on Universal Credit.
A further 300,000 will see no change to how much they get, while around 900,000 will be worse off under Universal Credit.
Anyone worse off will get transitional payments to top up their income to the same amount – but only through managed migration.
If you chose to move over and are worse off you won’t get them, so you need to check carefully if you’ll be better off and wait to be moved if not.
A benefits checker can help you understand if you’ll be better off or not.
Using an online benefits calculator can help you compare and are free and easy to use from charities such as Turn2Us and EntitledTo, and it’s also worth asking them for advice.
Once you move over, you won’t be able to go back to legacy benefits.
If you do find you’re better off on Universal Credit you can start making a claim straight away on the government website.