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Claimants with severe disability premium awards no longer exempt from the requirement to claim Universal Credit

15 January 2021

New regulations have been issued that will end the severe disability premium (SDP) barrier “gateway” to Universal Credit from 27 January 2021.

The new regulations also make changes to the eligibility for protection againt the loss of the SDP.

Universal Credit (UC) remains problematic for many disabled people due to issues such as the need to claim UC and maintain their claim digitally, the initial 5 week wait for payment (that can lead to the need to claim advance payment loans) and being paid monthly not fortnightly.

In addition, the new requirement to claim UC will inevitably lead to those disabled people with the SDP being financially worse off over time.

The SDP gateway

At present, the SDP gateway prevents claims to UC by claimants currently entitled to the SDP in their ESA, Jobseeker’s Allowance (JSA) or Income Support (IS).

Unlike means tested “legacy benefits” – ESA, JSA, and IS - UC does not include either the severe disability premium (SDP) or the enhanced disability premium (EDP).

The SDP is paid at  £66.95 weekly and EDP is paid at £17.10 weekly.

The SDP gateway was introduced after a successful High Court judicial review in the case of two claimants - TP and AR.

Both TP and AR were required to make a claim for UC due to its “natural migration” rules as they had moved into new local authority areasand could no longer claim housing benefit.

Both then saw an immediate drop in their income of around £180 a month due to the requirement that they claim UC.   

The High Court ruled that this reduction was unlawful on the basis that they had been unlawfully discriminated against and in January 2020, the Court of Appeal upheld that decision.

The ending of the SDP gateway from 27 January 2021

As a result of the High Court decision, the Government attempted to rectify the situation by making regulations which stopped other severely disabled people from migrating onto UC and provided that those like TP and AR, (who had already moved onto UC), would receive retrospective and ongoing transitional payments as recompense.

However, from October 2020 these transitional payments were no longer ringfenced and separate from other UC elements.

Under the new rules, they were instead classed as only a “transitional element”.

This means that if a claimant’s UC entitlement increases - for example if their rent goes up or even if they become 25 years old and so entitled to a higher personal allowance - the amount of the transitional SDP element, worth between £120 and £405 a month, will decrease by the same amount.

So a claimant will be no receive an increase and the worth of their transitional award for loss of SDP will continue to decrease over time.

As regards the general conditions for a transitional element based on the SDP, the new regulations provide that these are that the claimant must:

  • not be joining an existing universal credit claimant;
  • have been entitled (or been part of a couple where one member was entitled) to an award of income support, income-based JSA or income-related ESA that included an SDP within the period of a month preceding the first day on which they became entitled to universal credit; and
  • continue to meet the eligibility conditions for SDP at the time of their universal credit claim.

However, eligibility will be widened so that the element to both ex-partners of a couple following separation where the SDP had been included in the legacy benefit award.

This at least is a positive change as previously the non-claimant partner of the separated legacy benefit couple was excluded from entitlement to the SDP transitional payment as they were not a 'claimant'.

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

“The effect of the new regulations will mean that, after transitional help is eroded after time, UC for disabled people will be significantly less generous than ESA and the other legacy benefits it has replaced.

This is why the Disability Benefits Consortium (DBC), of which DR UK is a member, has developed proposals - Mending the Holes - for restoring lost disability elements to UC.

 The DBC also most recently made this submission to the Chancellor’s Comprehensive Spending Review: Supporting disabled people, in and out of work. DBC Submission to the Comprehensive Spending Review 2020."

 The new regulations - The Universal Credit (Transitional Provisions) (Claimants previously entitled to a severe disability premium) Amendment Regulations 2021 - are available from legislation.gov.uk.