The Department for Work and Pensions has launched a compensation scheme for people who suffered financial loss due to incorrect decisions during their move from legacy benefits to Universal Credit
The Department for Work and Pensions (DWP) has introduced the Successful Legacy Appeals Compensation Scheme for individuals who experienced financial disadvantage after transitioning from legacy benefits to Universal Credit due to a decision subsequently deemed incorrect.
The scheme follows a 2020 Court of Appeal ruling involving claimants who successfully appealed decisions to terminate their existing benefits but were unable to return to them after already claiming Universal Credit.
Under Universal Credit regulations, once an individual submits a claim for the benefit, their former legacy benefit ceases and typically cannot be reinstated. According to new GOV.UK guidance published on Thursday, individuals may be entitled to compensation if they received lower payments on Universal Credit than they had been receiving from their previous benefits.
The compensation scheme is available to claimants throughout Scotland, England and Wales, reports the Daily Record.
Legacy benefits covered by the scheme include:
- Housing Benefit
- Child Tax Credit
- Working Tax Credit
- income-related Employment and Support Allowance (ESA)
- income-based Jobseeker’s Allowance (JSA)
- Income Support
Who is eligible
You may be eligible for compensation if all the following apply:
- You have proof you were receiving one or more means-tested legacy benefits listed above
- A decision was made to end one of your legacy benefits, ending your entitlement
- Because of that decision, you successfully claimed Universal Credit within one month of your legacy benefit ending
- The amount of Universal Credit you were entitled to was less than what you received from your legacy benefit before the move
- 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 stated only individuals who satisfy all of these criteria will be entitled to compensation.
According to the guidance, payments will be calculated based on the claimant’s largest monthly financial shortfall multiplied by 12.
The DWP explained the lump sum is designed to reflect compensation comparable to what a court might have awarded for the financial hardship caused by someone being prevented from returning to their previous benefits. Individuals can apply by filling out a form accessible on GOV.UK or by submitting a letter containing the equivalent information requested on the form.
Applications can also be submitted by telephone for those unable to manage the paperwork independently.
The Department stated it strives to deliver decisions within six weeks of receiving an application.
It also noted the scheme is designed to ensure those affected by comparable circumstances do not need to seek additional compensation via the courts or a tribunal.
The compensation scheme follows the Court of Appeal case TD, AD and R v Secretary of State for Work and Pensions [2020] EWCA Civ 618, which determined some claimants experienced financial loss after being compelled to transfer to Universal Credit following incorrect decisions regarding their legacy benefits.
Complete information about the compensation scheme and the claims process can be located on GOV.UK.

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