A HUGE change to benefits and Universal Credit is coming in August and thousands of people will be affected.
The government is currently moving those on so-called “legacy benefits” such as tax credits onto Universal Credit.
1
Millions of people are still on these old-style benefits, but the government plans to move all claimants onto Universal Credit by the end of 2024.
The move, called Managed Migration, began in May last year and came after a successful pilot in Harrogate in July 2019.
Now households in five more areas of the country will get managed migration notices from August.
In these letters, those on tax credits are asked to claim Universal Credit instead.
From August, the Department of Work and Pensions (DWP) will make contact with people in the following areas:
It comes after the DWP said all Tax Credit household across the UK will have been contacted about moving to Universal Credit by September.
Once you receive a letter, you have three months to move over, or you could lose your current benefits.
Most read in Money
Over two million people are still on old-style legacy benefits, but the government plans to move the majority of them onto Universal Credit by the end of 2024.
In most cases, individuals will be better off following a move from legacy benefits to Universal Credit.
But 300,000 could be worse off, and should not move until they absolutely have to as they could end up with less money.
Where an individual’s Universal Credit payment is lower than their legacy benefits entitlement, they will usually be entitled to a top-up payment known as Transitional Protection.
This means that their Universal Credit entitlement will be the same as their legacy benefit entitlement at the point they move.
Recipients who receive a migration notice and fail to act will risk losing their current benefits entitlements.
It’s also worth noting that a change in circumstances before you receive a managed migration notice might deem you ineligible for tax credits and if so you’ll may be asked to apply for Universal Credit directly instead.
There are two types of tax credits – working tax and child tax credit.
You can choose to move over to Universal Credit from tax credits at any time – but it is best to check before doing so as 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.
The government estimates that around 700,000 tax credit claimants could be better off.
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.
What is Universal Credit?
Universal Credit is a welfare scheme that was designed to combine a number of old “legacy benefits” into a single monthly payment.
Whether you are eligible will depend on your individual circumstances.
You may be eligible if you meet all of the following criteria:
- You’re on a low income or out of work
- You’re 18 or over (there are some exceptions if you’re 16 to 17)
- You’re under State Pension age (or your partner is)
- You and your partner have £16,000 or less in savings between you
- You live in the UK
How much is Universal Credit?
Universal Credit payments are made up of a standard allowance and then various additional payments that depend on your circumstances.
This is how much you will get as your standard allowance each month:
- Single, under 25 – £292.11
- Single, 25 or over – £368.74
- Couple, joint claimants both under 25 – £458.51 (for both)
- Couple, joint claimants, one or both 25 or over – £578.82 (for both)
You may also get additional payments depending on your circumstances.
You may be able to get a top-up if you have children:
- For those with a first child born before April 6, 2017, the extra amount is £315
- For those with a child born on or after April 6, 2017 or second child and subsequent child, the extra amount is £269.58
- For those with a disabled child, the lower rate additional payment is £146.31 and the higher rate is £456.89
If you have a disability you could get an extra amount depending on your circumstances:
- For those deemed to have limited capability for work, the extra amount is £146.31
- For those deemed to have limited capability for work or work-related activity, the extra amount is £390.06
Universal Credit claimants can get an additional amount if they’re caring for a severely disabled person for at least 35 hours a week.
The amount you get is £185.86.
You can also get an increased work allowance:
- The higher work allowance (no housing amount) for someone claiming Universal Credit with one or more dependent children or limited capability for work is £631
- The lower work allowance for someone claiming Universal Credit with one or more dependent children or limited capability for work is £379.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
You can also join our new Sun Money Facebook group to share stories and tips and engage with the consumer team and other group members.
