Pat
No, this is not correct, the ESA legislation that covers the payment of the SD Premium has no provisions that cover the situation described by the DWP, if you meet the criteria for the Premium to be paid, which you continue to do, then the SD Premium should be paid.
Have you received a Decision Letter or is this some kind of suspension?
In the former case you should be requesting an MR of the Decision and for the latter I would make a formal complaint and contact your local MP.
Gordon
Nothing on this board constitutes legal advice - always consult a professional about specific problems