400,000 people could lose their benefits in the latest round of Government changes to the Universal Credit and legacy benefit system - with 900,000 more people also left worse off, according to reports. The Department for Work and Pensions will move everyone over to Universal Credit by the end of 2024, with moves from legacy schemes resuming next month, reports The Echo.
Government documents reveal this stage will see 400,000 people lose their entitlement to any social security and 900,000 people who keep their entitlement will receive less cash than they do currently. This will mostly be people on ESA (0.5m people) and in receipt of Tax Credits (300,000 people).
1.4million people will receive more cash under the plans and an estimated 300,000 people on legacy benefits will see "no change" to the amount they receive. Transitional protection payments are in place as part of the move, to ensure people's incomes do not drop overnight.
But in return their benefits will then effectively be frozen every April - possibly for years. That is because their transition payments will “erode” away each year as UC rises with inflation, until the benefit catches up with what they’re being paid. It means some claimants will not get any extra cash in April 2023 - despite predictions that benefits will see a bumper boost due to soaring inflation. Some people will also lose their transition payments - or miss out on them completely - if they have a change of circumstances. This can include a house move, a new job, a break-up or a first child.
Once transition payments stop claimants will only go back to the level of payment they were on under legacy benefits years earlier - with no account for the increases in inflation - meaning people will be getting less money in real-terms.
