MILLIONS of households are being switched over to Universal Credit, which will reduce some families’ benefit payments.
The Department for Work and Pensions (DWP) has confirmed who is expected to receive lower benefit payments following the move.
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Millions of claimants will start switching from the old to new welfare system from May 9 as the government resumes managed migration.
Small numbers will be moved off legacy benefits on to Universal Credit initially.
But the government’s goal is to get all 2.6million people still on old-style benefits moved over to Universal Credit by the end of 2024.
The managed migration is starting up again next month after a pause during Covid.
People can also choose to switch to Universal Credit if they think they will be better off.
The legacy benefits that are being phased out are Working Tax Credit, Child Tax Credit, income-based Jobseeker’s Allowance, Income Support, income-related Employment and Support Allowance and Housing Benefit.
The government has published a list of people who will be better or worse off after they’ve been moved to Universal Credit.
It has estimated that around 1.4 million people would have a higher entitlement on Universal Credit, 300,000 would see no change and around 900,000 households would get less.
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Bear in mind that the amount you’ll get is based on your specific circumstances, and this is just a guide.
You can work out how much you’ll be paid using an online benefit calculator.
If you’ll be worse off under the new benefits system, your payments will be topped up so you don’t face an immediate drop in income.
Who will get higher payments when they’re moved to Universal Credit?
The DWP says the people who currently receive the following benefits might see a higher entitlement under Universal Credit:
- Employment and Support Allowance (ESA) Support Group who are not in receipt of the Severe Disability Premium;
- In-work households receiving Housing Benefit only or Working Tax Credit and Housing Benefit (likely to have higher entitlements under UC as the earnings taper rules are more generous)
- People who do not work enough hours to receive Working Tax Credit
- Households who are not currently claiming all the legacy benefits they are entitled to
Who will get lower payments after switch to Universal Credit?
The DWP has also published a list of people who may get less money when they’ve been moved to Universal Credit.
It said this means they are “likely to be eligible for transitional protection if they are moved through the managed migration process”.
That means will be protected from an immediate drop in income if their Universal Credit entitlement is less than on legacy benefits.
Those people are:
- Households in receipt of Employment and Support Allowance (ESA) who are in receipt of the Severe Disability Premium and Enhanced Disability Premium
- Households with the lower disabled child addition on legacy benefits
- Self-employed households who are subject to the Minimum Income Floor, after the 12 month grace period has ended.
- In-work households that worked a specific number of hours (e.g. lone parent working 16 hours claiming Working Tax Credits), which discouraged progression in the labour market
- Households receiving tax credits with savings of more than £6,000 and up to £16,000
Transitional protection will top up their income to the same amount if they move under managed migration.
But that top-up will reduce over time with rises to Universal Credit, which increases each year.
Anyone who is moved from legacy benefits to Universal Credit under managed migration and is given transitional protection could miss out on extra cash.
When Universal Credit rises it will reduce the transitional protection, effectively freezing benefit amounts overall in future years.
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