HUNDREDS of thousands of households on benefits will be asked to move to Universal Credit sooner than planned.
The Department for Work and Pensions (DWP) has brought forward plans to move those on income-related employment and support allowance (ESA) to Universal Credit.
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It comes as all two million claimants on legacy benefits are set to move to Universal Credit (UC) or pension credit, under a process known as managed migration.
Universal Credit was set up to replace legacy benefits.
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.
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Once you receive a letter, you have three months to move over, or you could lose your current benefits.
Between May 2023 and September 2024, the DWP expects to send letters to 940,000 claimants on the following legacy benefits:
- Working Tax Credit
- Child Tax Credit
- Income-based Jobseeker’s allowance
- Income support
- Housing Benefit
It’s expected that all these households will have moved onto Universal by April 2025.
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The government had previously delayed the transition for those on income-related employment and support allowance (ESA) only or ESA and housing benefit to switch to Universal Credit until 2028/29.
However, the DWP has now u-turned on this position and will begin contacting all 600,000 households claiming these benefits later this year.
These households are then expected to complete their move to Universal Credit by the end of 2025 – three years ahead of schedule.
Warning for anyone on tax credits ahead of payments stopping as thousands lose £100m – move you must make to avoid missing out on cash
A WORD OF WARNING
It’s vital that households apply for Universal Credit within three months of receiving their managed migration letter.
Fail to do this and you risk having your benefits stopped.
In total, 31,460 households had their benefits stopped after failing to act upon a migration notice received between November 2022 and September 2023, according to the DWP.
According to figures provided to anti-poverty charity Z2K by the DWP, this means a typical household has lost out on roughly £4,130 a year.
This equates to £129.4million in benefits being stopped all because these claimants didn’t switch to Universal Credit.
What is managed migration?
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” .
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:
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- England: 0800 144 8 444
- Scotland: 0800 023 2581
- Wales: 08000 241 220
You can also get help online from advisers at www.citizensadvice.org.uk/about-us/contact-us/contact-us/help-to-claim/.
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 will 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 most recent 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.
