The Department for Work and Pensions (DWP) has officially confirmed that it will provide "one-off" compensation payments to certain Universal Credit claimants. This move comes as six outdated ‘legacy’ benefits are being consolidated into a single system—Universal Credit. These legacy benefits include Housing Benefit, tax credits (Child Tax Credit and Working Tax Credit), income-related Employment and Support Allowance, income-based Jobseeker’s Allowance, and Income Support.
Once an individual applies for Universal Credit, their legacy benefits cease, and they cannot revert to them. However, the DWP has now announced that affected individuals can apply for a "one-off payment under the Successful Legacy Appeals Compensation Scheme."
Eligibility Criteria for Compensation
To qualify for this compensation, claimants must satisfy all five of the following conditions:
- Proof of receipt: You must have evidence that you were receiving one or more means-tested legacy benefits, such as Housing Benefit, tax credits, income-related Employment and Support Allowance, income-based Jobseeker’s Allowance, or Income Support.
- Decision to end benefit: A decision was made to terminate one of your legacy benefits, ending your entitlement.
- Successful claim within one month: As a result of that decision, you successfully applied for Universal Credit within one month of your legacy benefit ending.
- Lower Universal Credit amount: The amount of Universal Credit you were entitled to was less than what you received from your legacy benefit before the move.
- Successful appeal: You challenged the decision that stopped your benefit and won, meaning you should have continued receiving your legacy benefit rather than claiming Universal Credit when you did.
The DWP emphasizes that only individuals who meet all these conditions are eligible under the scheme.
How Compensation Is Calculated
The DWP explains: "If you had to move to Universal Credit because of a decision that was later found to be incorrect, you may be entitled to a one-off payment. This applies if the amount you received from Universal Credit was less than you received from your legacy benefit." The scheme provides a lump sum payment similar to what a court might have awarded for the loss. This payment is intended to cover the money lost because you could not return to your old benefit. The lump sum is calculated by taking your biggest monthly loss and multiplying it by 12.
