The latest phase of the Department for Work and Pensions' Universal Credit scheme will see thousands of people stripped of any benefits.
All benefit claimants will be moved over to Universal Credit by the end of 2024, with moves from legacy schemes resuming next month. Government documents reveal this stage will see 400,000 people lose their entitlement to any social security.
Some 900,000 people who keep their entitlement will receive less cash than they do currently, the documents state. This will largely be people on ESA (0.5m people) and in receipt of Tax Credits (300,000 people).
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That said, some 1.4m people will receive more cash under the plans. An estimated 300,000 people on legacy benefits will see "no change" to the amount they receive.
The DWP has also revealed that Universal Credit barely makes a difference to getting people into work. It said that after nine months on Universal Credit, the employment rate was just two percentage points higher than under Jobseeker’s Allowance (JSA).
Transitional protection payments are in place as part of the move to Universal Credit. This is to ensure people's incomes do not drop overnight.
But in return their benefits will then effectively be frozen every April - possibly for years. That is because their transition payments will “erode” away each year as UC rises with inflation, until the benefit catches up with what they’re being paid.
It means some claimants will not get any extra cash in April 2023 - despite predictions that benefits will see a bumper boost due to soaring inflation. Some people will also lose their transition payments - or miss out on them completely - if they have a change of circumstances. This can include a house move, a new job, a break-up or a first child.
The DWP is also making another cut, as once transition payments stop claimants will only go back to the level of payment they were on under legacy benefits years earlier - with no account for the increases in inflation - meaning people will be getting less money in real-terms.
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