The Department for Work and Pensions (DWP) restarted the ‘managed migration’ process of moving legacy benefit claimants over to Universal Credit in May, with the aim of completing the transfer for 2.6 million people over the next two years. Only 500 people in Medway and Bolton are initially being moved to Universal Credit through the managed migration process as part of the ‘Discovery Phase’ before the number of case transfers increases.
The move for all legacy benefit claimants is scheduled to be completed by the end of 2024. People on older-style benefits include those on Income-Related Employment and Support Allowance (ESA), Working Tax Credits, Child Tax Credits, Income-Based Jobseeker’s Allowance (JSA), Housing Benefit and Income Support.
The risk for many people is that once a claim for Universal Credit is started it cannot be reversed, and estimations from the DWP calculate that some 900,000 legacy benefit claimants will receive less money when they move - although, it’s worth noting that around 600,000 will receive transitional protection through the managed migration process.
This is a concern recently raised by SNP MP, John McNally, he asked the DWP if it will “make it policy to allow a person to move back to legacy benefits from Universal Credit where that person decided to move from legacy benefits to Universal Credit owing to staff in her Department incorrectly advising that they would receive a higher payment on Universal Credit”.
In a written response, DWP Minister, David Rutley MP, said: “DWP staff should not advise claimants what to do in terms of whether to submit a claim to benefit, nor if a claimant would be ‘better off’ moving to Universal Credit or remaining on legacy benefits.
“However, staff will signpost claimants to information available via the Understanding UC website and independent benefit calculators for further information.”
He went on to explain that the replacement of the six legacy benefits by Universal Credit is a “large and complex undertaking” which has been “introduced in a controlled and phased manner”.
He explained: “It is therefore as a matter of fundamental policy design that once a claimant makes a claim for Universal Credit their existing legacy benefits will come to an end, this includes Tax Credits.”
Which groups are expected to be better or worse off on Universal Credit?
The DWP estimates ESA claimants who are in the support group but who do not get the Severe Disability Payment to be better off on Universal Credit.
Households who get ESA and receive the Severe Disability Premium and the enhanced disability premium, are expected to be worse off.
More details about which groups could receive a higher or lower entitlement on Universal Credit can be found here.
DWP estimates on who will receive higher or lower entitlements or see no change to the amount of benefit they receive are summarised below.
Higher entitlement after moving to Universal Credit
- ESA claimants: 600,000
- Tax Credits (Working and Child) claimants: 700,000
- Total, including other legacy benefits: 1.4 million
Lower entitlement after moving to Universal Credit
- ESA claimants: 500,000
- Tax Credits (Working and Child) claimants: 300,000
- Total, including other legacy benefits: 900,000
No change after moving to Universal Credit
- ESA claimants: 100,000
- Income Support: 100,000
- Total, including other legacy benefits: 300,000
Transitional protection
The DWP said that around 400,000 ESA and 100,000 Tax Credits claimants will receive transitional protection, which means they should not see any reduction in their benefits when they transfer.
However, the value of this protection will be eroded every year because, with the exception of the childcare element, any annual increase in Universal Credit will be deducted from the transitional protection.
You can read the full guide to the DWP's managed migration to Universal Credit on the GOV.UK website, here.
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