Exact dates for major changes to benefits come amid the Universal Credit shake-up
Thousands of households will experience a BIG change this year in five key benefits.
Households claiming one of the five legacy benefits will be asked to switch to Universal Credit.
If you refuse, you could be missing out on £1,000 in cash to help with essential bills and general living costs.
The government plans to move all two million claimants from legacy benefits to Universal Credit (UC) or pension credits by the end of March 2025, through a process known as managed migration.
This is because Universal Credit was set up to replace old benefits.
The process started in May last year after a successful pilot in July 2019.
Once you receive a letter, you have three months to switch. Otherwise, you may lose your current benefits.
Thousands of households that only receive tax credits have already received these notices.
But in a recent written statement, the government has now announced its plans to contact people on other inheritance benefits.
Jo Churchill, Minister of State for Employment, said: “Our plans for 2024/2025 are to issue migration notices for the benefit of working-age households.”
This will start from April with income support workers and those claiming tax credits with housing allowance.
Income support helps people who don't have enough to live on and are usually out of work, but new applications for the benefit have closed after Universal Credit was introduced.
Applicants for housing allowance will then be contacted in June.
Those claiming employment and maintenance benefits with child tax credits will then be contacted in July.
The Employment and Support Allowance provides financial help to people who cannot work because they are ill or disabled, and personalized support to help people into work if they are able to do so.
Those claiming job seeker's benefits will receive a migration notice from September.
The Sun previously reported that those claiming tax benefits who have reached state pension age will be asked to apply for Universal Credit or pension credit from August.
What is managed migration and who is affected by it?
Universal Credit replaces six benefits under the old social security system, commonly called legacy benefits. They are:
- Working tax credit
- Child tax credit
- income-related jobseeker's allowance
- Income support
- means-tested employment and support benefit
- Housing benefit.
Now, if you have any of these benefits, you can choose to switch, but you may not be better off.
You'll need to carefully consider what switching will mean for your money, as you won't be able to go back once you have Universal Credit.
Using an online benefits calculator can help you compare and is free and easy to use by charities such as Turn2Us And Entitled toand it is also worth asking them for advice.
You can switch to Universal Credit if there is a change in your circumstances, such as a move, a change in working hours or if you have a baby.
But eventually everyone will switch to Universal Credit.
This is known as 'managed migration' and plans for this were put on hold due to the coronavirus pandemic.
Am I better off with Universal Credit?
Around 1.4 million people will be better off with Universal Credit, the government estimates.
Another 300,000 would see no change in payments, while around 900,000 will be worse off under Universal Credit.
About 600,000 are expected to receive additional payments if they move under managed migration, so they don't immediately lose out on money.
The majority of them – around 400,000 – are entitled to Employment Support Allowance (ESA).
About 100,000 people benefit from tax credits, while fewer than 50,000 of them are expected to experience other inheritance benefits.
Examples of those who the government believes may be entitled to less on Universal Credit include:
- Households receive ESA who and the Severe Disability Premium and Enhanced Disability Premium
- Households with a child with a lower disability receive a supplement on top of the old benefits
- Self-employed households that fall below the minimum income limit after the 12-month grace period expires
- Working households who have worked a certain number of hours (e.g. singles).
parent who works 16 hours and claims employment tax credits) - Households receiving tax benefits with savings over £6,000 (and up to £16,000)
But they could miss out on any future benefit increases and see payments frozen.
Those who voluntarily move and are worse off will not receive these additional payments and could lose money.
Those who miss the deadline and file a claim later may also not receive this transitional protection.
The clock starts ticking on the three-month countdown from the date of the first letter, and reminders are sent via mail and text message.
After this, there will be a one-month grace period during which any claim to Universal Credit will retroactively expire and transitional protection can still be granted.
The latest data from the DWP shows that 61,130 people have made a claim for UC and 39,920 have been offered transitional protection.
Another 40,540 are still in the process of switching to the new benefit.
Help with claiming Universal Credit
In addition to benefit calculators, anyone switching from tax benefits to UC can find help in a number of places.
You can visit your local employment center, but search for find-your-nearest-jobcentre.dwp.gov.uk/.
There is also a free service called Help to Claim from Citizen's Advice:
You can also get help from advisors online at www.citizensadvice.org.uk/about-us/contact-us/contact-us/help-to-claim/.