People claiming legacy benefits will start moving over to Universal Credit from next week, the Government has confirmed.
The green light has been given for migration to start on Monday, May 9, which will affect over two million people still claiming benefits such as Tax Credits, Income Support and Jobseeker's Allowance.
The move was delayed due to Covid, and will initially start with just 500 people, but the full migration is planned to be complete by December 2024. Anyone claiming any of the legacy benefits will already have been moved to Universal Credit if they have had a change of circumstances like moving home or having a baby, and claimant can also chose to switch early if they think they will be better off.
Read more: Seven ways Universal Credit claimants can get help with their energy bills
Here's our full guide to the changes
What is Universal Credit?
Introduced in 2013, Universal Credit supports you if you are on a low income or out of work. It brings together a range of working-age benefits into a single payment, and is paid monthly.
Who is affected by the move?
The 2.6million people currently on legacy benefits will be affected by the move.
Universal Credit is replacing six benefits, commonly called legacy benefits. They are:
- Working Tax Credit
- Child Tax Credit
- income-based Jobseeker’s Allowance (JSA)
- income-related Employment and Support Allowance (ESA)
- Housing Benefit
Most of those hit are on Employment Support Allowance (ESA) (1.2 million) or Tax Credits (1 million). 200,000 are on Income Support and 100,000 on each of Housing Benefit and JSA.
Why is it happening now?
For some years, new claimants haven’t been able to get these benefits and must claim Universal Credit instead. But if people were already on these six benefits, they didn’t have to move to UC straight away. This transfer will now resume and complete by December 2024.
Will I lose any money?
It depends. The Government reckon that 1.4million people will be better off on Universal Credit, 300,000 will see no change to how much they get, and around 900,000 will be worse off. Of those 900,000 worse off, 300,000 claim Tax Credits and 500,000 ESA.
What will happen if I am worse off?
Around 600,000 of the 900,000 people who will lose out in the change are expected to get transition payments. This means they will not lose any money overnight. But if your circumstances change and you are moved naturally onto UC, you will not be able to get any transition payments. circumstances change
Who will get transition payments?
If you have ‘managed migration’ to UC and would be worse off, you'll get monthly transition payments to ensure your benefits income remains the same as it was before you moved to Universal Credit.
However,. there's a catch. Your benefits will be frozen in cash terms every April until the Universal Credit you ‘should’ be paid catches up with what you’re actually being paid. It means some people won't get any extra cash in April 2023 - despite predictions that benefits will see a bumper boost due to soaring inflation.
What happens if I have a change of circumstances?
If your circumstances change, the DWP might decide you are a ‘natural migration’ to Universal Credit, meaning you will not be eligible for transition payments and if you’re already receiving them, they stop. You will have to make a new claim for Universal Credit and take whatever you’re eligible for without an extra helping hand.
Do I need to apply for Universal Credit now?
No. People will start getting a “migration notice” in the coming months, giving them a three-month deadline to claim Universal Credit or have their benefits stopped. However, the DWP is encouraging the 1.4million people who will be better off under the new system to apply voluntarily.
How do I know if I will be better or worse off?
Legacy claimants are being encouraged to use a calculator - gov.uk/benefits-calculators - to find out. If you do find you're better off on Universal Credit you can start making a claim straight away, however, be aware that this move will be irreversible and will not come with transition cash.
Full list of winners and losers
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.
Each case is individual so this isn’t a guaranteed guide, but should give you an idea in the DWP’s own words.
Types of claimant that might see a higher entitlement under UC include:
- Employment and Support Allowance (ESA) Support Group who are not in receipt of the Severe Disability Premium;
- In-work households receiving Housing Benefit only, or Working Tax Credit and Housing Benefit (likely to have higher entitlements under UC as the earnings taper rules are more generous);
- People who do not work enough hours to receive Working Tax Credit; and
- Households who are not currently claiming all the legacy benefits they are entitled to.
Types of claimant that might see a lower entitlement under UC (and therefore likely to be eligible for transitional protection if they are moved through the managed migration process) include:
- Households in receipt of Employment and Support Allowance (ESA) who are in receipt of 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); and
- Households receiving tax credits with savings of more than £6,000 (and up to £16,000) - UC entitlement is reduced in a different calculation to tax credits (households with savings of more than £16,000 are not normally eligible for UC).
Is there anything else I should know?
There will be a dedicated helpline listed on the migration notice sent to claimants, or they can visit a Jobcentre.
There will also be a gap between old and new payments. It takes five weeks for your first Universal Credit payment to arrive, and ‘run-on’ payments of some legacy benefits will only cover two weeks of that. You can get an advance, which is interest-free, but you'll pay this back in instalments from future payments which will reduce how much you get each month. Moving to Universal Credit can affect other benefits you get, so check this carefully too.
