DWP speeds up Universal Credit changes and date ESA to be scrapped

Department for Work and Pensions NewsDWP accelerates Universal Credit changes and confirms date for ESA to be scrappedThe Department for Work and Pensions (DWP) has announced that they will be expediting the transition to Universal Credit for a significant number of individuals in the UK who are currently receiving Income-related Employment and Support Allowance (ESA). Income-related ESA is being phased out and was initially scheduled to be completed by the end of 2028. However, in a recent statement, Rachel Reeves revealed that all ESA claims will now cease two years earlier, by April 2026. ESA offers financial support to those unable to work due to health conditions or disabilities. The Budget documents explain that this decision aims to bring more people under a modern benefit system, providing support to help them seek and secure employment. Additionally, the documents clarify that approximately half of ESA claimants will receive increased financial assistance under Universal Credit, while others will receive transitional protection to ensure they do not face financial setbacks during the transition. After April 2026, new applications for ESA will no longer be accepted, and existing claimants will need to migrate to Universal Credit.

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Aside from ESA, Universal Credit will also replace other benefits, such as Working Tax Credit, Child Tax Credit, Income-based Jobseeker’s Allowance (JSA), Income Support, Income-related ESA, and Housing Benefit, according to reports from the Mirror. The transition to Universal Credit, known as “managed migration,” is being carried out gradually, based on the benefits currently being received by individuals. Once eligible for migration to Universal Credit, individuals will receive a “migration notice” letter through post, allowing them three months to make the switch. While it is possible to transition to Universal Credit earlier, individuals are advised to assess whether they would be better off under the new system, as reverting to previous benefits may not be an option. The DWP claims that 55% of people will benefit from Universal Credit, 35% may experience financial disadvantages, and the remaining claimants will see no change. Employing benefit calculators, such as those provided by Policy in Practice, entitledto, and Turn2us, can offer an initial indication of potential outcomes under Universal Credit.

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In cases where individuals experience financial losses as a result of being administratively transferred under managed migration, transitional payments will be available to offset these losses. However, this transitional support is exclusively for individuals transitioned through the formal managed migration process. To explore additional money-saving tips and advice, signing up for the Money newsletter might be useful. Seeking guidance from organisations like Citizens Advice or Turn2Us can provide personalised assistance and information.

The accelerated implementation of Universal Credit and the phasing out of ESA signal significant changes in the UK’s welfare system, impacting thousands of individuals. The shift aims to streamline benefit processes and provide better support to those in need while encouraging and facilitating transitions into employment. As the DWP progresses with the managed migration to Universal Credit, it is crucial for claimants to stay informed, assess their individual circumstances, and seek appropriate guidance to navigate these changes successfully.