Big change for 220,000 households on housing benefit starting in WEEKS – fail to act and you could lose £1,000s

A HUGE change is coming for 220,000 households on housing benefit which could see them lose £1,000s if they fail to act.

Households claiming this legacy benefit will be asked to move to Universal Credit in April.

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Refuse to do so and you could miss out on £1,000s worth of cash to help with essential bills and the general cost of living.

Housing benefit is given to households who are struggling to pay their rent due to unemployment or low-income.

But the government plans to move all two million claimants on legacy benefits to Universal Credit (UC) or pension credit by the end of March 2025, under a process known as managed migration.

This is because Universal Credit was set up to replace legacy benefits.

Households on Universal Credit who need help paying rent can get support through the “Housing Element” of the benefit.

The managed migration process began in May last year after a successful pilot in July 2019.

Eligible households are being contacted via letters in the post which tell them how to make the move from tax credits to Universal Credit.

Once you receive a letter, you have three months to move over, or you could lose your current benefits.

Thousands of households receiving tax credits-only have already received these notices.

But in a recent written statement, the government has now announced its plans to contact those on other legacy benefits.

This will start with income Support claimants and those claiming tax credits with housing benefit from April.

Housing benefit-only claimants will then be contacted in June.

Anyone getting Employment and Support Allowance (ESA) along with child tax credits will start being asked to switch from July.

Meanwhile Jobseekers Allowance (JSA) claimants are being contacted from September.

The Sun previously reported that those claiming tax credits who are over state pension age will be asked to apply for either Universal Credit or pension credit from August.

Those claiming income-related ESA alone will not be moved until 2028.

In 2024/25 the DWP estimates that around 440,000 will be contacted, with a breakdown as follows:

• Tax credits and housing benefit – 120,000
• Income support – 110,000
• Housing benefit only – 100,000
• Income-based ESA with child tax credits – 90,000
• Income-based JSA – 20,000
• Tax credits only – 10,000

Experts have previously warned that managed migration poses a risk to vulnerable people who face losing money.

Top bosses at charities including Mind, The Trussell Trust, Turn2Us and the Money and Mental Health Policy Institute said in 2022 that around 700,000 with mental health problems, learning disabilities and dementia could struggle to engage with the process.

More than 20 organisations have called on the government to halt managed migration to fix flaws in the system which those at risk could fall through.

A DWP spokesperson previously told The Sun: “We are committed to helping everyone transition to Universal Credit as smoothly as possible, as part of our work to streamline the benefits system, and recent research showed tax credit claimants have been able to navigate the Universal Credit system to make a new claim with minimal support.

“Benefits are only stopped as a last resort. Claimants are contacted multiple times within a three-month period to remind them of the action they need to take and support is also available via our dedicated migration helpline.”

What is managed migration and who is affected?

Universal Credit is replacing six benefits under the old welfare system, commonly called legacy benefits. They are:

• Working Tax Credit
• Child Tax Credit
• income-based Jobseeker’s Allowance
• Income Support
• income-related Employment and Support Allowance
• Housing Benefit.

If you’re on any of these benefits now, you can choose to move over – but you might not be better off.

You should consider carefully what moving over means for your money, as you can’t move back once you’re on Universal Credit.

Using an online benefits calculator can help you compare and are free and easy to use from charities such as Turn2Us and EntitledTo, and it’s also worth asking them for advice.

You may be moved over to Universal Credit if you have a change in circumstances, like moving home, a change in working hours or a have a baby.

But eventually everyone will be moved over to Universal Credit.

This is known as “managed migration” and plans for this were paused due to the coronavirus pandemic.

Will I be better off on Universal Credit?

Around 1.4million will be better off on Universal Credit, the government calculates.

A further 300,000 would see no change in payments, while around 900,000 will be worse off under Universal Credit.

Of these, around 600,000 are expected to get top-up payments if they move under managed migration, so they don’t lose out on cash immediately.

The majority of those – around 400,000 – are claiming Employment Support Allowance (ESA).

Around 100,000 are on tax credits while fewer than 50,000 each on other legacy benefits are expected to be affected.

Examples of those who may be entitled to less on Universal Credit according to the government include:

• Households getting ESA who and 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 (eg lone
  parent working 16 hours claiming Working Tax Credits)
• Households receiving tax credits with savings of more than £6,000 (and up to £16,000)

But they could miss out on any future increase to benefits and see payments frozen.

Those who move voluntarily and are worse off won’t get these top-up payments and could lose cash.

Those who miss the deadline and later make a claim may also not get this transitional protection either.

The clock starts ticking on the three-month countdown from the date of the first letter, and reminders are sent via post and text message.

There is a one-month grace period after this during which any claim to Universal Credit is backdated and transitional protection can still be awarded.

The latest data from the DWP shows 61,130 individuals have made a claim for UC, and 39,920 awarded transitional protection.

Another 40,540 are still in the process of moving to the new benefit.

Help claiming Universal Credit

As well as benefit calculators, anyone moving from tax credits to UC can find help in a number of places.

You can visit your local Jobcentre but searching at find-your-nearest-jobcentre.dwp.gov.uk/.

There’s also a free service called Help to Claim from Citizen’s Advice:

You can also get help online from advisers at www.citizensadvice.org.uk/about-us/contact-us/contact-us/help-to-claim/.

This post first appeared on thesun.co.uk