DWP issues major update on Universal Credit shake-up ahead of six benefits being axed for good
THE Department for Work and Pensions has issued a major update ahead of six benefits being scrapped.
Two million people on six legacy benefits are gradually moving to Universal Credit under a process known as managed migration.
Universal Credit was set up to replace these benefits and the scheme kicked off in November 2022 after a successful pilot in July 2019.
As part of the process, households on legacy benefits, including tax credits, are sent “migration notices” in the post which tell them how to make the move to Universal Credit as it’s not automatic.
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.
In a fresh a fresh update, the DWP has announced that the final batch of migration notices for five of the following benefits will be sent out by the end of December 2024:
- Working tax credits
- Child tax credits
- Income-based jobseeker’s allowance
- Income support
- Housing benefit (for those under the State Pension age)
These five benefits will be permanently discontinued in April 2025.
Therefore, if you receive a managed migration notice as part of the final batch in December, you must apply for Universal Credit by March to ensure your payments continue without interruption.
The remaining households, currently claiming income-related employment and support allowance (ESA), should receive their migration notice by the end of 2025.
This marks the sixth and final legacy benefit to be discontinued, with all ESA payments stopping permanently in April 2026.
Which benefits are stopping?
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, which is free and easy to use from charities such as Turn2Us and EntitledTo, can help you compare.
You may be moved to Universal Credit if your circumstances change, such as moving home, changing your working hours, or having a baby.
But eventually everyone will be moved over to Universal Credit under the managed migration process.
A WORD OF WARNING
Between July 2022 and September 30, 2024, the Department for Work and Pensions (DWP) sent almost 1.4 million migration notices.
However, according to the DWP’s latest figures, 318,834 individuals lost their benefits after failing to act on migration notices received between July 2022 and June 2024.
That’s why it’s vital to act on your migration notice within the three month deadline.
Some 883,944 individuals have since made successful claims for Universal Credit, and another 166,594 are still in the process of transitioning.
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 that could cause those at risk to fall through.
HELP CLAIMING UNIVERSAL CREDIT
As well as benefit calculators, anyone moving from tax credits to Universal Credit can find help in a number of ways.
You can visit your local Jobcentre by searching at find-your-nearest-jobcentre.dwp.gov.uk/.
There’s also a free service called Help to Claim from Citizen’s Advice:
- England: 0800 144 8 444
- Scotland: 0800 023 2581
- Wales: 08000 241 220
You can also get help online from advisers at citizensadvice.org.uk/about-us/contact-us/contact-us/help-to-claim/.
Will I be better off on Universal Credit?
ANALYSIS by James Flanders, The Sun’s Chief Consumer Reporter:
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 would be worse off under Universal Credit.
Of these, around 600,000 can get top-up payments (transitional protection) if they move under the managed migration process, 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.
Those who move voluntarily and are worse off won’t get these top-up payments and could lose cash.
Those who miss the managed migration deadline and later make a claim may not get transitional protection.
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.
Examples of those who may be entitled to less on Universal Credit include:
- Households getting ESA 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)
Either way, if these households don’t switch in the future, they risk missing out on any future benefit increase and seeing payments frozen.