Disabled people left short in universal credit move may get compensation

Tens of thousands of disabled people across the UK wrongly deprived of benefits by the Department for Work and Pensions could share in compensation potentially totalling about £150m after an appeal court ruling.

Lawyers for two disabled men who first took the DWP to court five years ago have written to the government asking them to set out how they will compensate them and others who were left hundreds of pounds out of pocket each year after being moved on to universal credit.

The court of appeal blocked an attempt by the DWP to overturn a high court ruling made a year ago which confirmed that the claimants, known as TP and AR, were unlawfully discriminated against when the DWP refused to repay their monthly benefit losses in full.

The appeal court decision, issued last month, brings to an end a lengthy legal process in which the DWP was criticised for wasting public funds and court time on defending policies that unlawfully impoverished thousands of vulnerable people.

The claimant AR said: “TP and I have had to fight for justice for five years and go to court four times. It is high time the DWP finally gets this right. The policy has caused me and others serious hardship. Now that the DWP has been refused permission to appeal last year’s court ruling, we expect them to pay us back the money we have lost and fix what they have been told repeatedly is discriminatory.”

Before they were transferred on to universal credit in 2016 and 2017 respectively, TP and AR received severe disability premium (SDP) and enhanced disability premium (EDP) payments worth £178 a month to help them meet the extra costs of living alone without a carer.

Both then moved house, a “change of circumstances” that meant they were automatically shifted on to universal credit. TP moved on clinical advice after he was diagnosed with a terminal illness, non-Hodgkin lymphoma and Castleman disease. AR, who had a mental illness, was forced by the bedroom tax to find a cheaper home.

Although they had been advised by DWP officials that under transitional relief rules they would not be out of pocket under universal credit, they found they were £178 a month worse off and were blocked from going back on to their old benefits. This left them struggling to meet their routine care needs.

The pair successfully challenged the reduced benefit payments in the high court in 2018, but when the DWP offered them compensation for the loss of SDP but not EDP – meaning they would receive £120 a month, rather than the £180 they had lost – they returned to the courts, with the high court finding in their favour in January 2022.

Evidence provided to the courts by the DWP indicated that 50,000 claimants were losing out by £60 a month, while the cost of providing transitional relief to similarly affected claimants moved on to universal credit would cost up to £150m over a six-year period up to 2024-25.

The claimants’ solicitor, Tessa Gregory, of Leigh Day, said: “Our clients have had to fight three judicial review claims extending over a period of more than five years. The secretary of state should have acted to remedy the unlawful discrimination after the first ruling against her in 2018. Instead, she chose to continue to short-change this highly vulnerable group of individuals and wasted public funds and court time on unnecessary legal proceedings.”

A DWP spokesperson said: “The government is aware of the recent court of appeal decision in relation to the judgment [involving TP and AR] and we will now consider the options available to us. We will continue to make transitional severe disability premium payments to those who are eligible.”

While the ruling was made in the jurisdiction of England and Wales, because the DWP policy applies across the UK the judgment will apply likewise.