For Phil Spanswick, who has lived all his life with shortened limbs, three fingers on one hand and four on the other, as a result of the thalidomide scandal, it was galling enough to have his benefits cut after reassessment. But it was doubly so to discover that the assessor had put his condition down as genetic.

“She was 21 and had trained as a paramedic and asked me three times how I had got my disability and what age was I when I got it,” says Spanswick. “She didn’t even know what thalidomide was, that it was manmade and babies were born with it.”

It is almost 60 years since the thalidomide drug was first licensed for use in the UK to counter the effects of morning sickness in pregnancy. By the time it was withdrawn within three years, in 1961, hundreds of babies in Britain and tens of thousands worldwide had been born with limb defects caused, it later transpired, by a component of the drug inhibiting the development of blood vessels and stunting growth.

The scandal became a cause celebre. The drug’s manufacturer in the UK, Distillers (now Diageo), fought a lengthy legal battle with the families affected and it was only after a campaign by the Sunday Times that compensation was settled in 1973 for most of the children, who were by then entering their teens. A long-awaited government apology finally came in 2010 and it was only after half a century in 2012 that the German inventor of the drug, the Grűnenthal Group, issued a statement saying it regretted the consequences.

Remarkably, people are still coming forward with claims for compensation. But as Spanswick’s experience suggests, the thalidomide story is slipping from the consciousness of even health and care professionals and the drug’s survivors – known as “thalidomiders” – are certainly winning no special favours from the reformed benefits system.

Spanswick, 54, has had his lifetime award of disability living allowance (DLA) downgraded under the reassessment process carried out as part of the benefit’s transition into the new personal independence payment (PIP). He is not alone: the Thalidomide Trust, set up as part of the 1973 settlement to administer compensation and represent the interests of survivors, knows of three other cases and suspects there are “quite a few” more.

“The effects of thalidomide are not well understood and the new assessment process can be difficult for individuals to understand and navigate,” says Deborah Jack, the trust’s director. While her team has been able to help other thalidomiders to protect their DLA awards, she explains, it was unaware of Spanswick’s case before it was too late.

Spanswick, who lives with his wife, Rachel, and two grown-up children in Lambourn, Berkshire, has one leg five inches shorter than the other, no left hip, virtually no arms and no thumbs. He is unable to tie his shoelaces, wash his hair and body, or use the oven or washing machine. He needs assistance to get dressed, although he has mastered the art of putting on a sock by using his other foot.

When he falls, which can be quite often, he cannot put his arms out to break the fall and so tends to hit the ground, injuring his head. He is incapable of getting back up by himself. Yet despite this, he has been assessed under PIP as being entitled to the standard mobility component, worth £21.80 a week, rather than the enhanced rate of £57.45.

Back in the 1980s, Spanswick was awarded higher-rate DLA for what he believed would be the rest of his days. “Up until then I had to keep having medicals, but the doctor said I obviously had a disability that was not going to get better and would only get worse –so they awarded me DLA for life,” he says.

Three years ago, however, the government began to roll out PIP as a replacement for DLA for people with a long-term health condition or disability. The reform meant compulsory testing regardless of previous lifetime DLA.

In December last year, the assessor, working for private contractor Atos, came to Spanswick’s house. “She filled in multiple-choice questions and asked me how far I could walk,” he recalls. “I have one leg shorter than the other, so it all depends. Cobbles are really hard and I can walk further if there are benches along the way so I can sit down and have a rest. These questions cannot be answered with a simple ‘yes’ or ‘no’.”

A few weeks later, on Christmas Eve, he was shocked to receive a letter saying he was eligible only for the standard mobility component. As a consequence, he has lost free car tax worth £515 a year for his vehicle and automatic entitlement to free parking. If he had run a car under the Motability scheme for disabled people, rather than his old, adapted 4x4, he would have had to forfeit that too. He asked for the mobility assessment to be reconsidered. At the end of February, he was informed that the decision had been upheld. He then lodged a formal appeal, but a tribunal has rejected his case.

A Department for Work and Pensions spokeswoman says PIP is a fairer and more objective system than DLA. “Decisions are made after consideration of all the evidence, including an assessment and information provided by the claimant and their GP”.

Spanswick who still gets the higher-rate “daily living” component of PIP, worth £82.30 a week and receives an amount of compensation through the Thalidomide Trust that he prefers not to disclose, says he used to have faith in the system, but now feels “completely let down” and the victim of injustice. “I feel like they are treating me like a scrounger. These assessments try and pigeonhole you, but you can’t pigeonhole disabled people.”

His battle with the DWP has also brought back bad memories for Spanswick’s elderly father. “My father is so upset at this as he feels he had to fight for me when I was young for something that was caused by a drug company. Now I am having to fight all over again.”

Thalidomide: the facts

There are currently 465 thalidomiders on the books of the Thalidomide Trust, but people are still coming forward with potential cases – at an average rate of one a week over the past two years.

Deborah Jack, director of the trust, admits that even she is amazed. But she explains that people who were born with relatively limited physical disorders, and have been able to cope for more than 50 years, may now be struggling.

“One of the most common minor disabilities caused is absence of thumbs, or really tiny thumbs,” Jack says. “While you may have been able to manage with that, after all this time the strain of using your hands unnaturally to compensate starts to tell on your hands.”

By no means all claims for compensation are accepted after investigation. Many similar disabilities have other causes.

The trust administers investments of £130m provided by Diageo and a separate fund set up by the government in 2012, worth £80m in England over 10 years. Payments are made to thalidomiders according to the extent of their impairment.