The UK Government recently said that it “remains committed” to completing the managed migration move from legacy benefits to Universal Credit within the planned timescale. Chancellor Jeremy Hunt announced in November 2022 that people on Employment and Support Allowance alone (ESA) will not be moved from the older IT system to Universal Credit until 2028/29.
However, benefit claimants may not be aware that by the end of 2024/25 the Department for Work and Pensions (DWP) aims to have completed the moves of all legacy cases with Tax Credits - including those on both ESA and Tax Credits, all cases on Income Support (IS) and Jobseeker’s Allowance (JSA) and all Housing Benefit (HB) only cases.
In a newly published report reviewing the Discovery Phase of the managed migration process, DWP said the moves in 2024/25 will allow HM Revenue and Customs (HMRC) to close down the Tax Credit system for those of working age and DWP to close down Income Support and JSA, “generating savings for taxpayers”.
People on legacy benefits selected to move to Universal Credit through the managed migration process will receive a letter inviting them to apply for the benefit within three months from the date on the letter.
If they fail to do so and their legacy benefit is stopped, DWP Minister for Employment, Guy Opperman MP, has shared details on what will happen which should settle any uncertainty people may have about the process.
He said that anyone in that situation will be able to make a claim to Universal Credit within one month of their benefit being terminated and it will then be backdated to their deadline date. They will also receive Transitional Protection where entitled.
Mr Opperman explained: “The Department has provided significant support to claimants as part of the Discovery Phase of the Universal Credit Programme.
“For the Discovery cohorts, claimants were granted an automatic one-month extension to their deadline date. If a claimant did not claim by their extended deadline, they were notified that their current benefit(s) would be terminated unless they had significant support needs requiring a further extension.
“To encourage and support claimants to claim Universal Credit, the Department sent text messages and phone calls during the one-month extension period. Where appropriate, the Department provided enhanced support, including home visits, to engage claimants face-to-face.”
He continued: “For those claimants who require significant support, the Department holds case conferences with local Advanced Customer Support Senior Leaders who provide local expertise, working with different organisations to take a multi-agency approach to supporting our most vulnerable claimants.
“For claimants who have their benefits terminated, if they then make a claim to UC within one month of their benefit(s) being terminated, their claim is then backdated to their deadline date and they will still receive Transitional Protection where entitled.”
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.
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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