Thousands on benefits have £300 a month payments TERMINATED in Universal Credit shake up – how to avoid it

THOUSANDS of people on benefits have had their payments terminated amid a massive shake up of Universal Credit.

Tax credit claimants are being asked to move to the new all-in-one benefit that replaces six legacy ones.

Thousands on benefits have had their payments terminatedCredit: Getty

But thousands of people who have received so-called migration notices telling them they will need to claim Universal Credit (UC) instead have failed to do so, new figures reveal – leaving them around £300 a month worse off.

Letters to hundreds of people on the old style benefit started going out last year as part of the shake up, and ramped up this year with 117,690 sent notices so far.

The government aims to get around 2million on legacy benefits on to UC by the end of 2024.

Anyone who gets a notice has three months in which to make the move to Universal Credit.

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But a Freedom of Information (FOI) request by the Z2K shows that claimants were receiving £300 on average a month.

That’s based on 770 of them who were asked to move between November 20222 and March 2023 but didn’t.

Ayla Ozmen, director of policy and campaigns, Z2K told The Sun: “We know that many people have missed their deadline to move across to UC and so DWP has cut off their benefits.

“We’re pushing for DWP to change this position as we’re really concerned that low-income households will lose vital income.

“It’s so important that the DWP gets this right as tens of thousands of people claiming tax credits will be asked to move over to UC this year and more than two million people will move over in the coming years, including seriously ill and disabled people receiving Employment and Support Allowance.”

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 last year 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 said: “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.”

The latest figures come as the government announced a crackdown on unemployed Universal Credit claimants who face losing benefits.

Those who refuse to find work will face losing extra perks like free prescriptions and legal aid.

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.