Universal credit: Government failing to compensate 10,000 severely disabled claimants, MPs warn

Thousands of severely disabled people who were wrongly left about £100 a month worse off after moving onto universal credit are still being denied the money they are owed, MPs have warned.

The government was condemned for failing to compensate the vulnerable claimants – despite losing a High Court case – amid growing fears of a further delay until the autumn.

Ministers have also failed to pass promised regulations to start the next stage of universal credit, with just four days to go until MPs pack up for their long summer break.

Frank Field, chairman of the commons work and pensions committee, attacked the delays, saying: “About 10,000 people are still waiting for compensation.

“Why won’t the government stop fighting this all the way through the courts and just get on with giving disabled people the money they’re owed?”

Amber Rudd, the work and pensions secretary, will be confronted over the impasse in an evidence session on Wednesday – although she could be moved hours later, in Boris Johnson’s expected reshuffle.

The Department for Work and Pensions (DWP) has been under pressure to act over people with severe disabilities since losing the court case last year – and again on appeal in May.

Two men known as TP and AR, and a woman known as SXC, who received severe disability premium (SDP) benefits, successfully argued they were discriminated against when moved onto universal credit.

TP and AR received £6,517 and £4,788 respectively in compensation for the pain and distress caused, plus payments of £173.50 and £176 a month respectively to cover the shortfall in their benefits.

The government then proposed regulations to give SDP claimants moving onto universal credit before January this year compensation of £80 a month, with £180 a month for those moved afterwards – but they have not been passed.

Mr Field said: “The government belatedly accepted that it had been wrong to push some of the country’s most vulnerable citizens onto universal credit, slashing their incomes in the process.”

The committee chairman released a letter from Ms Rudd in which she said she was not expecting a delay to the next stage of universal credit, known as “managed migration”.

It has already been scaled back to just 10,000 people, after ministers scrapped a vote on transferring 3 million because of fears the new benefit – which merges six working-age benefits into a single payment – pushes people into poverty.

The committee noted there were just four sitting days before the House of Commons rose for summer recess, suggesting the government had run out of time.

“With no sign that those regulations will be put to parliament this week, it seems clear that the pilot will not be starting on time, or anytime soon,” it said.

Ms Rudd has admitted universal credit was likely to be the main cause of the explosion in food bank use, but insisted she had made changes to make advances on payments easier.