Universal Credit and the Severe Disability Premium
This Commons Library briefing looks at how Universal Credit will affect benefit claimants who are, or were, getting the Severe Disability Premium. It covers measures which came into force in January 2019 to prevent people getting SDP from moving onto UC until they can receive transitional protection, and "SDP transitional payments" for those who have already moved to UC and lost SDP.
The Severe Disability Premium (SDP) is an addition payable with means-tested social security benefits. Universal Credit does not include an element equivalent to SDP – or indeed any of the disability premiums currently available. Disabled people may therefore find that their entitlement to UC is significantly lower than their previous “legacy” benefits. Transitional protection will be available to those moving onto UC at the final “managed migration” stage so that they are not worse off in cash terms at the point of transfer, but this does not apply to people who move onto UC by “natural migration” – i.e. following a change of circumstances.
In June 2018 the High Court ruled that the Secretary of State unlawfully discriminated against two men who had to claim Universal Credit when they moved to another area, and as a result experienced a sudden drop in income due to there being no equivalent to SDP (and the Enhanced Disability Premium) within UC. The DWP compensated the two individuals for the losses experienced, but the Court left it to the Government to devise a wider solution.
On 16 January 2019, regulations came into force preventing people in receipt of benefits including SDP from moving onto Universal Credit until the final managed migration stage, when they can receive transitional protection. Separate regulations in force from 24 July provide for “SDP transitional payments” – both backdated and on an ongoing basis – for people who moved from legacy benefits to UC before 16 January and lost SDP. The DWP is reviewing UC claims to identify those may be eligible for payments. Around 45,000 claimants are expected to benefit from this package of support.
The two claimants in the original High Court case are seeking to challenge the latest regulations on the grounds that the transitional payments still do not fully compensate for the shortfalls experienced by some people previously getting SDP on moving to Universal Credit.
This Commons Library briefing gives further background to the abolition of the Severe Disability Premium and covers developments since the High Court judgment.