Huge change for around 1million on benefits from today amid Universal Credit shakeup – how you can avoid losing cash
A HUGE change is on the way for around one million on benefits from today amid a Universal Credit shakeup.
The Department for Work and Pensions (DWP) is axing six benefits as it transfers claimants across to the new system in a process known as “managed migration”.
From September 1, households claiming employment and support allowance (ESA) and jobseeker’s allowance (JSA) will be asked to switch to Universal Credit.
Under the plans, Universal Credit will replace a range of means-tested benefits and tax credits, currently known as “legacy benefits”.
ESA is a benefit you can claim if an illness or disability is affecting your capacity to work.
Income-based JSA is a benefit for people who are not in full-time employment (work less than 16 hours per week), are capable of working and are looking for work.
However, both benefits are being replaced by Universal Credit.
The managed migration process officially kicked off in November 2022 after a successful pilot in July 2019.
As part of the process, eligible households on legacy benefits are sent “migration notices” in the post, which tell them how to make the move to Universal Credit, which is not automatic.
From September, the DWP will begin contacting those claiming ESA and income-based JSA only, asking them to make the switch.
It’s vital that households apply for Universal Credit within three months of receiving their managed migration letter.
Failing to do this can result in your benefits being stopped.
What you need to be aware of
Since July 2022, the DWP has sent nearly 1.14million migration notices.
However, according to its latest figures, 284,660 individuals lost their benefits after failing to act on migration notices received between July 2022 and June 2024.
Some 623,310 individuals have since made successful claims for Universal Credit, and another 232,830 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.
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.
How managed migration is progressing
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.
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 started being asked to switch in July.
Meanwhile, 20,000 claimants on jobseekers allowance (JSA) will be contacted from September.
The Sun previously reported that, in August, thousands claiming tax credits who are over state pension age will be asked to apply for either Universal Credit or pension credit.
However, pensioners claiming tax credit as part of a joint claim, where a spouse is still under the state pension age, will be asked to claim Universal Credit from September instead.
Initially, those claiming income-related ESA alone were not supposed to be moved until 2028.
However, the DWP brought forward plans to move these households to Universal Credit by the end of 2025.
From September 2024, 800,000 households will begin to receive letters explaining how to move from ESA to Universal Credit.
Are you missing out on benefits?
YOU can use a benefits calculator to help check that you are not missing out on money you are entitled to
Charity Turn2Us’ benefits calculator works out what you could get.
Entitledto’s free calculator determines whether you qualify for various benefits, tax credit and Universal Credit.
MoneySavingExpert.com and charity StepChange both have benefits tools powered by Entitledto’s data.
You can use Policy in Practice’s calculator to determine which benefits you could receive and how much cash you’ll have left over each month after paying for housing costs.
Your exact entitlement will only be clear when you make a claim, but calculators can indicate what you might be eligible for.
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.
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