The Department for Work and Pensions (DWP) restarted the ‘managed migration’ process of moving up to 2.6 million people currently claiming legacy benefits over to Universal Credit (UC) in May.
Five hundred people in Medway and Bolton were initially selected to go through the process as part of the ‘discovery phase’ before DWP ramps up transfers to achieve its completion deadline by the end of 2024. It recently announced people in Truro and Falmouth will be sent Migration Notices from July 25.
DWP is providing ‘transitional protection’ for those who are moved to Universal Credit, which means their entitlement will not be lower than it currently is on a legacy benefit, however, this is only the case if they are moved via the managed migration process. But DWP confirmed this week that this protection is “not designed to provide indefinite financial protection” and could be “terminated” following the move.
Alliance MP, Stephen Farry, asked DWP when the “plans to cease transitory protections for people undergoing managed migration to Universal Credit in 2023-2024” will come into effect.
In a written response on July 20, DWP Minister, David Rutley MP, said the payment protection “will erode by increases in other elements of UC or where new elements (other than the Childcare Costs element) are awarded to a claimant’s UC award”.
He explained: “Transitional Protection ensures eligible claimants moved by the Department from legacy benefits to UC will not have a lower entitlement than they had via legacy benefits at the point of their move to UC.
“This protection is not designed to provide indefinite financial protection.”
He went on to explain three changes in circumstances where the protection could be stopped following the move to Universal Credit.
These include:
- when a claimant separates from their partner, which would change nature of claim (joint to single)
- when a claimant forms a new couple, which would change nature of claim (single to joint)
- where the Universal Credit award ceases
Mr Rutley said: “It can also be terminated if a claimant experiences a significant change of circumstances such as where a claimant separates from their partner or forms a new couple, or where the UC award ceases.
“Once stopped, a claimant’s transitional element will not generally be reapplied to their UC award, should they make another UC claim.”
However, he added that there is an exception to this.
He said: “The exception is where the original Universal Credit claim was stopped due to an increase in earnings and a new claim to Universal Credit is made within four months of the date for which Universal Credit was last awarded.”
Legacy benefits moving to Universal Credit
- Income-Related Employment and Support Allowance (ESA)
- Income-Based Jobseeker’s Allowance (JSA)
- Working Tax Credit
- Child Tax Credit
- Income Support
- Housing Benefit
Everyone moving over from legacy benefits will have their entitlement to Universal Credit assessed against their current claims, with top up payments available for eligible claimants whose entitlement would have been reduced because of the change - ensuring they receive the same entitlement as on a legacy system.
These will continue unless their circumstances change.
Migration process from legacy benefits to Universal Credit
There are three ways people can migrate to Universal Credit, outlined in the DWP’s ‘2022-24 strategy for implementing the final phase of Universal Credit’ - you can read it in full on the GOV.UK website, here.
These are:
- Natural migration - a change of circumstances triggers a move
- Voluntary migration - claimants chooses to move
- Managed migration - DWP triggered
The DWP explains: “Of the 2.6 million households remaining on legacy benefits in April 2022, should they choose to claim UC today, we estimate around 1.4 million (55%) would have a higher entitlement on UC, 300,000 would see no change and approximately 900,000 households (35%) would have a lower entitlement.”
The DWP also estimates that of the 900,000 households who would essentially be worse off moving to Universal Credit, around 600,000 would receive transitional protection through the managed migration process, while others will “either leave benefits, migrate naturally before DWP asks them to move or receive a severe disability transitional payment”.
You can read the full guide to the DWP's managed migration to Universal Credit on the GOV.UK website, here.
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.
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