The Department for Work and Pensions (DWP) plans to scrap six benefits by the end of 2024, moving claimants over to Universal Credit instead. The changeover was paused during the Covid-19 pandemic but started up again in May this year.
The payments that are set to change are Child and Working Tax Credit, Income-based Jobseeker’s Allowance (JSA), Income Support, Income-related Employment and Support Allowance (ESA), and Housing Benefit. The reason behind the move is due to Universal Credit being a simpler and more modern system that uses more up to date IT than the others, according to the DWP.
In most cases people can not now make a new claim for these benefits, and must instead apply for Universal Credit, The Express reports. In some areas of the UK, households have already started to move over.
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People will receive a 'migration notice' in the post when they are going to be moved over, which will give them a three-month deadline to claim Universal Credit. If the person doesn't make a claim for Universal Credit in that timeframe, the current older benefit they are on will automatically end.
Once a person has made a Universal Credit claim, their older, 'legacy' benefit will stop and they will have to wait five weeks for their first Universal Credit payment to arrive. To help bridge the gap, some legacy benefits will 'run on' for a few weeks, but tax credits will stop as soon as the person claims Universal Credit.
Legacy benefits claimants do not have to wait to be told they are moving to Universal Credit. Anyone who thinks they will be better off on the new benefit can switch right away.
People are being encouraged to check whether this would be the case by using an independent benefits calculator. This is because some claimants may not be better off on Universal Credit.
According to the DWP, 1.4 million people will be better off on Universal Credit, while 300,000 will see no change in their income. However, 900,000 may be worse off on the new system.
The department says that these people will be provided with top-up payments to make sure they don't lose out compared to what they received on the legacy system. Those payments will then continue unless their circumstances alter.
People who are unsure about whether or not they will be better off are advised to wait. This is because the top-up payments will only be provided to those who are moved to Universal Credit by the DWP, not those who switch voluntarily.
The Government announced the move away from the legacy system in 2012, arguing that Universal Credit would be better "suited to the 21st century". It says that the legacy benefits use "ageing and inflexible IT systems".
Universal Credit claimants will see a 10.1 per cent rise in payments from April next year, after the Chancellor confirmed that benefits payments will rise in line with the inflation figure for 2022.
The increases in monthly payments for different groups of people will be as follows:
- Single under 25 - increasing from £265.31 to £292.11
- Single 25 or over - increasing from £334.91 to £368.74
- Couple both under 25 - increasing from £416.45 to £458.51
- Couple one or both 25 or over - increasing from £525.72 to £578.82
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