Martin Lewis Money Show issues urgent warning to millions on benefits not to ignore DWP letter or payments could STOP
MARTIN LEWIS has warned households to take action if they receive certain letters being sent out by the Department for Work and Pensions (DWP).
Speaking on The Martin Lewis Money Show on ITV this week, he urged viewers that they could end up worse off if they delay taking action to the unexpected letters.
The government is moving all two million people currently on legacy benefits to Universal Credit in a process known as managed migration.
As part of this process, households on legacy benefits will receive “migration notices” by post.
These notices provide instructions on how to switch to Universal Credit, as crucially, the transition is not automatic.
Originally, the last load of people to be migrated was going to be in 2028/2029.
But the government has confirmed it is speeding up the process by two years, aiming to complete the move by 2026.
Responding to a query sent into the show, Martin said: “This is about the mandatory movement of people currently on Tax Credits – but they’re accelerating it for others – onto Universal Credit.”
On the show, Lewis Zarins-Brown, Money Buddies debt advice specialist, explained: “It was going to be the last cohort of people transfer on 2028/2029 – it’s now going to be 2025/2026.
“So, anybody whose on this record that’s going to get changed will get a letter, with three months to put in an application for Universal Credit.
“If you do it within that three months it will protect your level of income. It won’t drop, so long as your situation does not change, if it changes, it might drop a bit.
Martin interjected, saying: “But, if you don’t reply to that letter, then the new level of Universal Credit could be lower than your existing benefits, and it will drop.
“So there’s a clarion call here – if you get that letter, respond straight away.”
Households currently receiving income-related ESA due to illness or disability are also being encouraged to transition to Universal Credit.
The Budget documents added: “This move will bring more people into a modern benefit regime, continuing to ensure they are supported to look for and move into work.
“Around half of ESA claimants will receive more financial support on UC, while others will receive transitional protection to ensure nobody is worse off at the point at which they move over to UC.”
This means that from 2026, households will no longer be able to renew their income-related ESA claims.
These households must switch to Universal Credit or their payments will stop.
Respondents must follow the instructions on how to switch to Universal Credit, as the transition is not automatic for them either.
Households must apply for Universal Credit within three months of receiving their managed migration letter.
Failing to do this can result in benefits being stopped.
Hundreds of thousands of households on Tax Credits, Income Support, Housing Benefit and income-based Jobseeker’s Allowance (JSA) will have to switch before April 2025.
Will I be better off on Universal Credit?
AROUND 1.4million people on legacy benefits will be better off after switching to Universal Credit, according to the government.
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 (e.g. 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 if they don’t switch in the future, they’ll risk missing 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.
MANAGED MIGRATION PROGRESS
In January, the government announced the number of migration notices it plans to send out in the coming financial year.
Before this date, the focus was sending migration notices to households claiming Tax Credits only.
However, 110,000 Income Support claimants and a further 120,000 claiming Tax Credits with Housing Benefit started receiving their letters in April.
Then, over 100,000 Housing Benefit-only claimants were contacted in June.
More than 90,000 people claiming employment and support allowance (ESA) along with Child Tax Credits were asked to switch in July.
In August, those claiming tax credits who are over state pension age were asked to apply for either Universal Credit or pension credit.
Since September, 20,000 claimants on jobseekers allowance (JSA) have been asked to switch.
Around 800,000 households have also started receiving letters explaining how to move from income-related ESA to Universal Credit.
A WORD OF WARNING
Since July 2022, the Department for Work and Pensions (DWP) has sent nearly 1.14million migration notices.
However, according to the latest figures from the DWP, 284,660 individuals lost their benefits after failing to respond to migration notices received between July 2022 and June 2024.
That’s why it’s vital to ensure that you switch to Universal Credit within three months of receiving your letter.
Failure to do this will stop your current benefit payment.
You will also forfeit transitional protection top-up payments designed to ensure you do not lose money when transitioning to Universal Credit under the managed migration process.
Some 623,310 individuals have since made successful claims for Universal Credit, and another 232,830 are still in the process of transitioning.