People in four specific groups will get a Universal Credit payment boost when moving from their current welfare benefits. But others receiving existing 'legacy benefits' will eventually end up with less.
Universal Credit is replacing six benefits that will eventually be phased out - Child Tax Credit, Housing Benefit, Income Support, Income-based Jobseeker’s Allowance (JSA), Income-related Employment and Support Allowance (ESA) and Working Tax Credit.
As reported by Birmingham Live, the process of the transferring people over to Universal Credit is called managed migration. The Department for Work and Pensions is sending out a letter called a migration notice this week to those affected.
The DWP says around 1.4 million (55 per cent) of the 2.6 million remaining legacy benefits claimants would get more money if on Universal Credit instead. A further 300,000 would see no change in their payments and approximately 900,000 households (35 per cent) would get less.
Anyone ending up with less will see payments will at first receive a top-up under a policy called 'transitional protection'. It is designed to stop people from being hit by a sudden drop in income but the DWP points out that the transitional protection will "erode over time".
"You can only get this top-up if you have received a Migration Notice letter from DWP and claim by the deadline date on your letter," the DWP warned. "If your circumstances change before you make your claim, this may affect the amount you get.
"You should claim as soon as possible to make sure the amount you are currently entitled to can be protected. Any transitional protection you receive as part of your Universal Credit claim may stop if you have a change in circumstances once you've made your claim."
Claimants who may get a Universal Credit payment boost
- Employment and Support Allowance (ESA) Support Group who are not in receipt of the Severe Disability Premium;
- In-work households receiving Housing Benefit only or Working Tax Credit and Housing Benefit - these are likely to have higher entitlements under Universal Credit as the earnings taper rules are more generous;
- People who do not work enough hours to receive Working Tax Credit; and
- Households who have not been claiming all the legacy benefits they are entitled to
Claimants who may get a Universal Credit payment drop
- Households in receipt of Employment and Support Allowance (ESA) who are in receipt of 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 (for example, lone parent working 16 hours claiming Working Tax Credits), which discouraged progression in the labour market. This was not good for employees, but it also caused problems for employers, limiting their scope to design jobs to fit their business rather than the incentives created by the welfare system; and
- Households receiving tax credits with savings of more than £6,000 (and up to £16,000) - UC entitlement is reduced in a different calculation to tax credits (households with savings of more than £16,000 are not normally eligible for UC).
How many people are affected?
Jobseeker's Allowance (JSA)
This category includes those claiming income-based JSA as well as those also claiming it alongside Tax Credits and/or Housing Benefit.
- Higher payment when moved to Universal Credit - fewer than 50,000 people
- Same amount when moved to Universal Credit- fewer than 50,000 people
- Lower payment when moved to Universal Credit- fewer than 50,000 people
Employment and Support Allowance (ESA)
This category includes those claiming only income-related ESA as well as those also claiming it alongside Tax Credits and/or Housing Benefit.
- Higher payment when moved to Universal Credit- 600,000 people
- Same amount when moved to Universal Credit- 100,000 people
- Lower payment when moved to Universal Credit- 500,000 people
Income Support
This category includes those claiming only Income Support as well as those also claiming it alongside Tax Credits and/or Housing Benefit.
- Higher payment when moved to Universal Credit- fewer than 50,000 people
- Same amount when moved to Universal Credit- 100,000 people
- Lower payment when moved to Universal Credit - fewer than 50,000 people
Tax Credits
This category includes those claiming Tax Credits and those who are also claiming Housing Benefit.
- Higher payment when moved to Universal Credit - 700,000 people
- Same amount when moved to Universal Credit - fewer than 50,000 people
- Lower payment when moved to Universal Credit- 300,000 people
Housing Benefit
This category includes those who just get Housing Benefit and none of the other legacy benefits.
- Higher payment when moved to Universal Credit - 100,000 people
- Same amount when moved to Universal Credit- fewer than 50,000 people
- Lower payment when moved to Universal Credit - fewer than 50,000 people
Mixed age couples
A mixed age couple is defined as a couple where one partner is a pensioner and the other is under pension age. This means one is on State Pension and may also be receiving Pension Credit, while the other is on legacy benefits.
- Higher payment when moved to Universal Credit - fewer than 50,000 people
- Same amount when moved to Universal Credit - fewer than 50,000 people
- Lower payment when moved to Universal Credit - fewer than 50,000 people
The DWP warned if people don't comply by setting up a Universal Credit account and moving across, their payments will be stopped.
