The Department for Work and Pensions (DWP) is set to phase out six benefits for millions of individuals within the next three weeks. This transition is part of a move towards Universal Credit (UC), with managed migration being the process through which individuals on older benefits are transferred to UC. Managed migration had already begun in some parts of Wales and the UK but was halted due to the Covid-19 pandemic. However, it resumed in 2023, and by the end of 2024, a significant portion of support claimants will have moved to UC, with the rest to follow suit.
The benefits that will be phased out include Employment and Support Allowance (ESA), Income Support, Jobseeker’s Allowance, Housing Benefit, Child Tax Credit, and Working Tax Credit. New claims for these benefits are no longer accepted, with most individuals now required to apply for UC instead. There have been targeted transitions of households to the new system in specific areas of the UK, including parts of south west and south east Wales in September and October 2023. The DWP has been sending out letters to households instructing them to make a Universal Credit claim within three months.
Failure to apply for UC during this transition period could result in individuals losing their current benefits. Once a UC claim is initiated, all previous benefits are stopped, with an average waiting period of five weeks before the first UC payment is received. While some previous payments may be temporarily extended during the transition, tax credits cease as soon as a UC claim is processed. By the end of the 2024/25 fiscal year, it is anticipated that the majority of individuals will have switched to UC, except for those on ESA or ESA in combination with another legacy benefit, with tax credits scheduled to be transferred by 2028.
Transitioning to UC can have varied financial outcomes for individuals, with some experiencing increased income while others may receive less financial support. In recognition of this, the DWP has assured that it will provide top-up payments to eligible individuals facing income shortfalls under the new system. The department notes that most people on UC will either receive the same amount they previously obtained from their benefits or potentially more. Transitional protection in the form of top-ups is available for those who are entitled to more under their existing benefits than what UC offers.
To access this top-up, individuals must have received a migration notice letter from the DWP and submit their claim by the deadline specified in the letter. Any changes in circumstances before making the claim could affect the amount of top-up received. The DWP advises claiming as soon as possible to ensure the current entitlement is protected. However, any transitional protection provided as part of the UC claim may cease if there are alterations in circumstances post-claim submission.
The shift to Universal Credit represents a significant change for millions of benefit claimants across the UK. While it aims to streamline the benefits system and make it more efficient, there are concerns about the potential impact on individuals’ finances and stability. As the managed migration process continues, it will be crucial for those affected to understand the implications, seek guidance if needed, and ensure a smooth transition to the new system to safeguard their financial well-being.
The DWP’s commitment to providing top-up payments for eligible individuals highlights the department’s recognition of the challenges that may arise during this period of change. Effective communication, clear guidelines, and support mechanisms will be key in helping individuals navigate this transition and access the assistance they require to maintain financial stability and security.