The Department for Work and Pensions (DWP) recently announced plans to restart the ‘managed migration’ process of moving legacy benefit claimants over to Universal Credit from next month.
Up to 2.6million people on older style benefits including 1.2million currently claiming Income-Related Employment and Support Allowance (ESA) and one million on Working Tax Credits and Child Tax Credits, 100,000 on Income-Based Jobseeker’s Allowance (JSA) and Housing Benefit, plus 200,000 on Income Support.
The DWP also recently announced that only 500 people will initially be moved to Universal Credit through the managed migration process, but this will increase over the coming months in order to complete the move for all claimants by the end of 2024.
Legacy benefit claimants will receive a ‘migration notice’ giving them three months notice of when the ‘managed migration’ process will begin.
However, there are three ways people will migrate to UNiversal Credit, outlined in the DWP’s ‘2022-24 strategy for implementing the final phase of Universal Credit’ - which you can read in full 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 1.4m people on legacy benefits may be better off when they move to Universal Credit - some 54 per cent.
However, by those same estimations the DWP figures suggest that 900,000 people (35%) will be worse off and 300,000 will see no change (11.5%).
Migration process options
Natural migration
Natural migration has been in place since the introduction of Universal Credit and happens when a change of circumstances such as a change in employment status or family situation happens so they need to make a new claim for a benefit that Universal Credit has replaced and they will ‘naturally’ migrate to Universal Credit.
The DWP also explained: “Covid-related easements that were in place for working tax credit recipients have now been removed and we expect natural migration to continue at a steady rate going forward.”
The DWP said claimants should consider the following before choosing to move to Universal Credit:
- Check that you are eligible to claim Universal Credit
- Check your savings - anyone with over £16,000 in savings or capital is not eligible for Universal Credit and should not apply. If you or your partner have over £6,000 in savings or capital, your Universal Credit payments will be lower
- Check how Universal Credit recovers any outstanding debts you may have
- Use one of the independent benefit calculators to see if your entitlement to Universal Credit could be higher than the money the UK Government pays you now
Voluntary migration
Claimants can choose to voluntarily move across to Universal Credit, however, the complexity of the legacy benefits system means it can be difficult for people to see and compare their overall entitlements.
The DWP is encouraging everyone to use an independent benefits calculator to work out if they would be on a higher or lower payment when they move to Universal Credit to help them make the best migration decision.
DWP said: “We want to help claimants make an informed choice themselves about whether to move voluntarily.
“This approach is about making sure that those who stand to see a higher entitlement have the opportunity to move sooner rather than later, while simultaneously making sure those who may have a lower Universal Credit award wait for managed migration when they may be eligible for transitional protection so they retain the same entitlement at the point they move.”
People who choose to move voluntarily are not entitled to transitional protection which is why it is important that claimants are sure they are making the right choice.
Once an application is made to move to Universal Credit, there is no reverting to previous benefits.
For those claimants who do not choose to move and have not migrated naturally following a change of circumstance, we will need to manage their migration to UC.
Managed migration
For those claimants who do not choose to migrate voluntarily nor have migrated naturally, the DWP will need to manage their migration to Universal Credit.
DWP explains: “Underpinning managed migration is our commitment to transitional financial protection to ensure that eligible households we move to Universal Credit do not have a lower award on UC at the point we move them if their UC entitlement is lower than their entitlement on legacy benefits.
“We recognise that claimants’ confidence, experience and trust in the benefit system will vary. That is why the managed migration track will also be underpinned by a customer-focused approach with effective processes and systems to move people across safely.”
DWP has several key tasks to focus on to start managed migration:
- gathering data on the different circumstances of legacy benefits’ claimants
- designing the processes and tools to calculate both UC entitlement and transitional protection (where applicable), then paying the correct award
- assessing and providing the different levels of support required to make a successful claim
- considering how best to notify claimants about their move
- understanding the different challenges claimants may face after making their claim to UC and the support they need
Transitional Protection
Parliament legislated to introduce Universal Credit and for the end of legacy benefits, including Tax Credits. When passing this legislation, Parliament also committed to providing transitional financial protection for those who are moved onto Universal Credit through the managed migration process.
Transitional protection does not apply to those who naturally or voluntarily migrate.
This means those eligible households with a lower calculated award in Universal Credit than their legacy benefits awards will see no difference in their entitlement at the point they are moved to Universal Credit, provided there is no change in their circumstances during the migration process.
However, the DWP warned that the transitional protection element will “erode over time” with increases in Universal Credit elements - excluding the childcare costs element - and will stop with certain changes of circumstances.
The UK Government has also provided additional protection for those who had a change in circumstance and have been receiving Severe Disability Premium.
In addition, all new claimants and those migrating fromTax Credits who are gainfully self-employed will be eligible for a 12-month start-up grace period before the Minimum Income Floor applies, to help them grow their business.
Will I have a higher or lower Universal Credit entitlement than I receive now?
Types of claimant that might see a higher entitlement under Universal Credit include:
- 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 (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
- Households who are not currently claiming all the legacy benefits they are entitled to
Types of claimant that might see a lower entitlement under Universal Credit (and therefore likely to be eligible for transitional protection if they are moved through the managed migration process) include:
- Households in receipt of 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)
- Households receiving Tax Credits with savings of more than £6,000 (and up to £16,000) - Universal Credit entitlement is reduced in a different calculation to Tax Credits. households with savings of more than £16,000 are not normally eligible for Universal Credit
Before making any decision about moving to Universal Credit, the DWP advises looking at the ‘Understanding Universal Credit’ webpage on GOV.UK here.
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