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Compensation for loss of severe disability premium through claiming Universal Credit

26 July 2019

New regulations have made provision for compensatory ‘transitional payments’ for those who were in receipt of the severe disability premium (SDP) as part of their’ legacy benefit’ award but lost this on moving to Universal Credit (UC).

Note: legacy benefits are income-based job-seeker's allowance, income-related employment and support allowance, income support, housing benefit, and tax credits. These benefits are replaced by UC.

The ‘transitional payments’ will comprise of:

  • an ongoing monthly payment to those who are eligible for it; and
  • an additional lump-sum payment to cover the period since they moved to UC.

The new regulations abolish, from January 2021, the SDP Gateway that prevents claimants entitled to the SDP from making a claim to UC if they have a relevant change of circumstances.

Once the Gateway is removed claimants will move to UC if they have a relevant change of circumstances and may be eligible to be considered for transitional payments.

The monthly ‘transitional payments’ reflect the amount of SDP that a claimant was receiving prior to migration, and are a flat rate of:  

  • £285 a month for claimants not in the UC limited capability for work related activity (LCWRA) group (the broad monthly equivalent of the lower rate SDP at £65.85 a week)
  • £120 a month where the UC claimant has been determined as having LCWRA, and who therefore already receives an additional amount in their UC award because of their health condition. The higher rate of the LCWRA component is taken into account against the extra payments offered by the transitional protection
  • £405 a month where joint claimants were receiving the higher couple rate SDP in their existing benefits
  • £285 a month where joint claimants were receiving the lower couple rate SDP and are not receiving the LCWRA component in UC
  • £120 a month where joint claimants were receiving the lower couple rate SDP and are receiving the LCWRA component in UC

Ken Butler DR UK’s Welfare Rights and Policy Adviser said:

“Over 13,000 disabled people previously received SDP have lost this on moving to UC.

While the introduction of these compensation payments is really good news, its important to remember that the Government has had to be forced to provide them only because of a significant legal judgement.

The High Court ruled on 3 May 2019 that the Government’s UC migration arrangements for those who previously received the SDP and moved onto Universal Credit before 16 January 2019 were unlawful.

And the compensation payments will not help those who meet the SDP eligibility criteria only after their move to UC.

A permanent solution to protect the vital support that people with severe disabilities receive through premiums.

The Government should introduction a disability element to UC itself to replace the disability premiums that have been cut from the UC system.”

Note: The new regulations also include the following measures:

  • introduce the process that existing benefit1 claimants will follow when they are managed migrated to UC
  • create a managed migration pilot so that once 10,000 awards of UC have been made to persons to whom a managed migration notice has been issued, no further notices may be issued by the Department;
  • from 22 July 2020 a two-week run on of Income Support, income-based Jobseekers Allowance and income-related Employment and Support; Allowance for those who have to claim UC;
  • improvements for the self-employed on UC; and
  • protection for some who are in education when ‘manage migrated’ to UC

The Universal Credit (Managed Migration Pilot and Miscellaneous Amendments) Regulations 2019 are available @ http://www.legislation.gov.uk