Major Universal Credit shake-up affects millions of benefits claimants today

Millions of people will be moved off legacy benefits onto Universal Credit from Monday (Photo: Getty Images)
Millions of people will be moved off legacy benefits onto Universal Credit from Monday (Photo: Getty Images)

Millions of people who claim benefits will be switched onto Universal Credit from today as part of a government shake-up.

Around 2.6 million people still claiming legacy, or ‘old-style’, benefits in the UK will start to receive letters urging them to apply for Universal Credit.

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It includes those who claim Income Support, income-based Jobseeker’s Allowance (JSA), tax credits, income-related Employment and Support Allowance (ESA) and Housing Benefit.

What are the changes?

From Monday (9 May), the Department of Work and Pensions (DWP) will restart “managed migration” of people on benefits such as Employment and Support Allowance (ESA) and Working Tax Credit on to the new system.

The process was paused during the pandemic, but the government hopes to phase everyone on to the new system by the end of 2024.

Only around 500 people will be invited to move over at first, but the DWP will increase the numbers of people it processes over the coming months to bring everyone across from the old welfare system to Universal by December 2024.

A “migration notice” will be sent to claimants in the post when it is their turn to be moved over to the new system, and will be given a three-month deadline to claim Universal Credit.

Those who do not start a claim for Universal Credit within the three months will see their current benefits automatically stop after this deadline.

Once you make a Universal Credit claim, old benefits payments will be stopped. You will then have to wait five weeks for your first Universal Credit payment to arrive.

Which benefits are being replaced?

The following benefits will be replaced by Universal Credit:

- Working Tax Credit- Child Tax Credit- Income-based Jobseeker’s Allowance (JSA)- Income Support- Income-related Employment and Support Allowance (ESA)- Housing Benefit

Most claimants being moved over to Universal Credit are on ESA (1.2million) or Tax Credits (1million), while 200,000 are on Income Support and 100,000 on each of Housing Benefit and JSA.

Will claimants be better off?

The DWP claims 1.4 million legacy claimants (55%) are set to be better off under the new system, 900,000 (35%) would be worse off, and 300,000 other benefit claimants will see no change.

A spokesman said: “Over five million people are already supported by Universal Credit.

“It is a dynamic system which adjusts as people’s earnings change, is more generous overall than the old benefits, and simplifies our safety net for those who cannot work.

“Roughly 1.4 million people on legacy benefits would be better off on Universal Credit, with top up payments available for eligible claimants whose Universal Credit entitlement is less.”

However, more than 20 charities have urged the government not to resume moving people receiving older benefits on to Universal Credit unless it can guarantee that people’s income will not be cut off during the cost-of-living crisis.

Groups have written to Work and Pensions Secretary Therese Coffey warning that plans to move legacy benefit claimants on to the new system are “too dangerous to continue”.

They warn that the incomes of more than 700,000 people with mental health problems, learning disabilities and dementia could be put at risk by the move, and that the consequences of having benefits halted could be “devastating and life-threatening”.

In a written statement submitted to the House of Commons on 25 April, Ms Coffey said she is “absolutely committed to making this a responsible and safe transition”.

In the letter to Ms Coffey, the groups wrote: “We believe that your approach for moving people receiving older benefits on to Universal Credit risks pushing many of them into destitution.

“We ask you to consider the devastating consequences for someone who faces challenges in engaging with the process having their only income cut off, especially during this cost-of-living crisis.”