Some Universal Credit claimants were wrongly moved from legacy benefits
Certain Universal Credit claimants who were compelled to transfer from older benefits due to a Department for Work and Pensions (DWP) mistake could be eligible for a one-off compensation payment.
The DWP has issued guidance setting out who may apply under its Successful Legacy Appeals Compensation Scheme, which is intended to compensate individuals who suffered financial losses after incorrectly switching to Universal Credit.
The scheme covers a limited number of claimants whose legacy benefits were wrongfully terminated before they successfully contested the decision.
Since making a claim for Universal Credit automatically terminates entitlement to legacy benefits, some individuals who subsequently proved the initial decision was incorrect were unable to revert to their former benefits and found themselves receiving reduced financial support.
The DWP stated the compensation scheme seeks to rectify that financial shortfall, reports the Daily Record.
To be eligible, claimants must have been in receipt of one or more means-tested legacy benefits, including Housing Benefit, Child Tax Credit, Working Tax Credit, income-related Employment and Support Allowance (ESA), income-based Jobseeker’s Allowance (JSA) or Income Support.
They must also have submitted a Universal Credit claim within one month of their legacy benefit ceasing as a result of the decision to halt their payments.
The sum they obtained through Universal Credit must have been lower than what they were receiving under their former benefit. Furthermore, the decision to halt their legacy benefit must subsequently have been overturned or reversed, confirming that they should have continued receiving that benefit and ought never to have been required to claim Universal Credit. Only those who satisfy all of these criteria are entitled to apply.
Successful claimants could receive a one-off lump sum designed to reimburse them for the financial losses incurred following their move to Universal Credit. The payment is calculated by taking the claimant’s biggest monthly financial loss and multiplying it by 12.
For instance, someone who lost £50 a month after moving to Universal Credit could receive a lump sum of £600, while a claimant who was £100 a month worse off could receive £1,200.
The compensation is intended to reflect the losses people experienced as a result of being unable to return to their previous benefit following a successful challenge to the original decision.
The scheme follows a Court of Appeal judgment in 2020 involving claimants whose legacy benefits had been wrongly stopped. The court concluded that while individuals could not be reinstated on to their previous benefits after claiming Universal Credit, those who received a reduced level of support had suffered a financial loss.
The DWP confirmed that the compensation scheme has been established for those affected by such circumstances. Applicants will be required to demonstrate that they were in receipt of a qualifying legacy benefit prior to transitioning to Universal Credit, and that the decision to end their benefit was subsequently overturned or reversed.
Claims can be submitted via the GOV.UK website, where applicants can also access comprehensive eligibility criteria and guidance regarding the supporting evidence they may need to supply.


You must be logged in to post a comment Login