The Department for Work and Pensions (DWP) has issued an update for disability benefit claimants who may be eligible for thousands of pounds in compensation.

The payments are being allocated to people who received certain disability benefits such as Employment and Support Allowance, but lost disability premiums after being transferred to Universal Credit before January 2019.

As a result, some people missed out on severe disability premium (SDP) and enhanced disability premium (EDP). Legal firm Leigh Day challenged this reduction in income through the courts, arguing that some people experienced payment decreases of up to £180 monthly, reports the Mirror.

Compensation of more than £5,000

The DWP agreed to compensate for the income reduction, which Leigh Day estimates could be worth more than £5,000 per person. However, the DWP has now recognised that around 13,000 cases remain unprocessed and unresolved.

In its annual report published earlier this month, it stated: “Unfortunately, some underpayments may be owed to customers who no longer have an active ESA claim and restrictions in data make it difficult to identify, assess and correct these errors.”

The DWP suggested it expects the remaining cases will be resolved by September. It is estimated that 57,000 individuals were affected by the issue and the total cost of the repayment programme is projected to be £452 million.

Leigh Day secured a settlement for 275 claimants following its High Court challenge, with these individuals receiving between £200 and £3,000 in damages.

Losses after moving to legacy benefits

A spokesperson for the DWP told the Independent: “We are fully committed to identifying claimants that are owed arrears and providing the financial support to which they are entitled as quickly as possible, with the majority of these cases having already been resolved.

“We are clear that errors like this one should not happen and have already taken action to avoid future errors.”

Earlier this year, Leigh Day solicitor Ryan Bradshaw stated: “I am glad to have settled this claim on behalf of my clients. However, there are thousands of others who have been similarly affected who have not been in a position to bring a claim like this.

“They too will have experienced the loss of £180 a month after they were moved from legacy benefits on to universal credit in the years before January 2019. They too will have suffered unnecessary stress.”

It comes as the DWP is concluding the transition of everyone on so-called legacy benefits to Universal Credit. The benefits being replaced by Universal Credit include: Housing Benefit, Income-related Employment and Support Allowance, Income-based Jobseeker’s Allowance, Child Tax Credit, Working Tax Credit and Income Support.