The Department for Work and Pensions (DWP) has now restarted the ‘managed migration’ process of moving legacy benefit claimants over to Universal Credit, with the aim of completing the transfer for 2.6 million people over the next two years.
However, the DWP recently confirmed that only 500 people will initially be moved to Universal Credit through the managed migration process, which will increase over the coming months in order to complete the move for all claimants by the end of 2024.
More than 20 charities urged the UK Government not to restart moving people receiving older benefits on to Universal Credit unless it can guarantee nobody’s income will be cut off during the cost of living crisis.
New figures released by the Office for National Statistics (ONS) show that inflation has increased to a 40-year high of 9% in the 12 months to April, up from 7% in March.
The figure means that the price of everything from food to fuel is set to increase, putting Chancellor Rishi Sunak under massive pressure to take more action to help millions of people.
The managed migration process to Universal Credit is expected to leave an estimated 900,000 households worse off.
Labour MP, Rachael Maskell, recently asked the DWP what estimates have been made of the average change in income per person that transfers from legacy benefits to Universal Credit.
In a written response, David Rutley MP, from the DWP, said: “Around 1.4 million people currently on older ‘legacy’ benefits would see their entitlement increase by an average of £220 a month on moving to Universal Credit and another 300,000 see no change.”
The Minister added: “For the minority of eligible claimants who have a higher entitlement on legacy benefits than on Universal Credit, transitional protection will top up their Universal Credit when they move over.”
By the DWP’s own estimated calculations, set out in its guidance on managed migration, some 900,000 people on legacy benefits will be worse off on Universal Credit.
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 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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