Thousands of people who were moved from their original disability benefits to Universal Credit could get a share of £150million in compensation.
It comes after a court ruled in favour of two severely disabled men, who argued they were left hundreds of pounds out of pocket after their benefits were changed.
Both received severe disability premium (SDP) and enhanced disability premium (EDP) payments worth £178 a month before being transferred to Universal Credit in 2016 and 2017.
The pair were automatically shifted onto Universal Credit after moving houses, which the DWP deemed a "change of circumstances".
They went on to successfully challenge the reduced benefit payments in the high court in 2018 - but the DWP offered them compensation only for the loss of their SDP, equalling £120 per month.
They returned to court to challenge the compensation and the High Court again ruled in their favour in January 2022.
Lawyers have now written to the Government asking them to set out how they will compensate them and others who were moved to Universal Credit.
In the evidence provided to the courts, the DWP showed that 50,000 claimants were losing out by £60 per month.
It is estimated the cost of providing transitional relief to those also affected would cost up to £150 million over a six-year period up to 2024-25.
One of the claimants said he "had to fight for injustice for five years" which caused him and others "serious hardship".
He then goes on saying that the pair "expect them to pay us back the money we have lost and fix what they have been told repeatedly is discriminatory".
Tessa Gregory, of Leigh Day, said that her clients had to "fight three judicial review claims extending over a period of more than five years" to get the result they wanted.
Ms Gregory continued: "Instead, she chose to continue to short-change this highly vulnerable group of individuals and wasted public funds and court time on unnecessary legal proceedings.”
A DWP spokesperson said: “The government is aware of the recent court of appeal decision in relation to the judgment [...] we will now consider the options available to us.
“We will continue to make transitional severe disability premium payments to those who are eligible.”
