The Department for Work and Pensions (DWP) restarted the ‘managed migration’ process of moving legacy benefit claimants over to Universal Credit in May, with the aim of completing the transfer for 2.6 million people over the next two years. Only 500 people in Medway and Bolton are initially being moved to Universal Credit as part of the ‘Discovery Phase’ before the number of case transfers increases.
The move for all legacy benefit claimants is scheduled to be completed by the end of 2024. People on older-style benefits include those on Income-Related Employment and Support Allowance (ESA), Working Tax Credits, Child Tax Credits, Income-Based Jobseeker’s Allowance (JSA), Housing Benefit and Income Support.
The risk for many people is that once a claim for Universal Credit is started it cannot be reversed, and estimations from the DWP calculate that some 900,000 legacy benefit claimants will receive less money when they move - although, it’s worth noting that around 600,000 will receive transitional protection to safeguard their level of payment through the managed migration process.
And in response to a question from Liberal Democrat MP, Wendy Chamberlain on the subject, the DWP said that as long as there is no change to a claimant’s circumstances during the managed migration process, then they will see “no difference in their entitlement at the point they are moved to Universal Credit”.
Ms Alexander asked the DWP what estimate has been made of the number of people who will receive a reduced benefit award after migrating to Universal Credit.
In a written response, DWP Minister, David Rutley MP said: “Parliament has committed to providing transitional financial protection for those who are moved onto Universal Credit through the managed migration process.
“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.”
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.
You can read the full guide to the DWP's managed migration to Universal Credit on the GOV.UK website, here.
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