Thousands of households miss out on DWP benefits payments worth £1,000s in Universal Credit shake-up
HOUSEHOLDS on six legacy benefits that are being replaced by Universal Credit are missing out on thousands of pounds a year after their payments were axed.
New government figures show 338,718 benefit claimants lost out by not making the move to Universal Credit within an important three-month window.
Two million claimants on legacy benefits are gradually being moved over to Universal Credit in a process called managed migration.
The DWP began to issue its first migration notices from May 2022 onwards.
Full-scale managed migration started in April 2023 and gradually expanded to different areas of Great Britain.
As part of the process, eligible households on legacy benefits, such as tax credits, are sent “migration notices” in the post.
These letters tell them how to make the move to Universal Credit as the process is not automatic.
It is essential that households apply for Universal Credit within three months of receiving this letter or their benefits could be stopped.
Between July 2022 and August 2024, the Government sent out 1,306,824 migration notices.
However, according to the DWP’s latest figures, 338,718 individuals lost their benefits after they did not claim Universal Credit by December 2024.
Around 962,536 claimed Universal Credit by the deadline.
Successful claims by benefit
Failure to claim varies hugely depending on the benefit.
For example, 50% of working tax credit claimants have had their claims closed without claiming Universal Credit.
Meanwhile, 32% of child tax credit claimants saw their claims closed before they claimed Universal Credit.
The success rate for Employment and Support Allowance is much higher.
Migration notices for Employment and Support Allowance began to be sent out in September.
What is managed migration?
THE government is moving millions of claimants on legacy benefits to Universal Credit.
These benefits include:
- Tax Credits: Working Tax Credit and Child Tax Credit
- Income Support
- Income-based Jobseeker’s Allowance (JSA)
- Income-related Employment and Support Allowance (ESA)
- Housing Benefit, unless you’re in supported or temporary accommodation
But other benefits, such as the Personal Independence Payment (PIP), will stay the same.
Housing Benefit will also be ending unless you are in supported or temporary accommodation.
You will receive a letter telling you when your benefits will end.
To continue to receive your payments you must claim Universal Credit by the deadline date given in your letter.
The deadline is usually at least three months after the date the notice was sent.
If you get tax credits, the deadline to claim Universal Credit will be no later than April 6, 2025.
This is the case even if this is less than three months from the date on your notice.
Tax Credits are ending for good on April 5, 2025.
Around 37,481 migration notices were sent out between September and December last year.
Of this group 26.5% have successfully claimed Universal Credit, while 73.2% of applications are in progress.
Just 0.33% of their legacy benefit claims have been closed.
How to claim Universal Credit
If you receive a migration notice, it is vital that you act.
To continue receiving payments you need to claim Universal Credit by the deadline date given in your letter.
If you are unable to claim Universal Credit by this date you should contact the Universal Credit Migration Notice Helpline as soon as possible.
Call 0800 169 0328 between 8am and 6pm on any weekday.
You could get more time to make a claim if you have a good reason.
But you need to request this before your deadline date.
If you need help claiming Universal Credit then you can find help in a number of ways.
You can visit your local Jobcentre by searching find-your-nearest-jobcentre.dwp.gov.uk/
There’s also a free service called Help to Claim from Citizen’s Advice.
Call the following numbers for support:
- 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?
Around 1.4million will be better off on Universal Credit, the government calculates.
A further 300,000 will 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 (eg 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 they could miss 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.
The most recent data from the DWP shows 61,130 individuals have made a claim for UC, and 39,920 awarded transitional protection.
Another 40,540 are still in the process of moving to the new benefit.