The Department for Work and Pensions (DWP) will be sending claimants letters telling them they must switch to Universal Credit or risk their payments being stopped. The DWP said 500,000 people will be affected by the change.
In an announcement on Tuesday, April 9, the DWP letters will be sent from this month. People on certain ‘legacy’ benefits which are due to stop being paid must change to Universal Credit.
The first change will impact those receiving Income Support and Tax Credits with Housing Benefit. In June, claimants only getting Housing Benefit will be contacted.
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People getting ESA (Income Based) with Child Tax Credit will be sent letters from July. Those claiming Tax Credits (Pension Aged including mixed aged couples) will get letters from August and JSA (Income Based) from September.
More than 130,000 people have already switched from tax credits to the modern digital Universal Credit system. The DWP says the system allows claimants to access their benefits more easily and amend claims if circumstances change.
The Government says people on Universal Credit have a better chance of finding work within six months. But many have failed to make the change.
Last month, Work and Pensions Topical Questions in the House of Commons was told that people are losing out on £3,200 a year by failing to switch their benefits over. With this scheme, the Department for Work and Pensions is replacing Income Support, income-based Jobseekers Allowance, income-related Employment and Support Allowance, Housing Benefit, Child Tax Credits and Working Tax Credits with Universal Credit.
People will get a letter telling them they need to make a new application. But about a quarter of claimants, including many vulnerable people, are failing to do so.
Minister for Employment Jo Churchill MP said: “Universal Credit is a proven benefits system fit for the modern age. With even more people moving to Universal Credit, we can continue to provide the best level of support for people to secure financial independence through work.
“I would encourage all those who receive their Migration Notices to take action to ensure they continue to receive the benefits they are entitled to.”
The DWP said benefit claimants will not lose out financially when moving to Universal Credit. If a claimant’s entitlement to Universal Credit is lower than their legacy benefit entitlement, they will be entitled to a top-up payment known as Transitional Protection.
This will make sure their Universal Credit is the same as their legacy benefit entitlement. Migration Notices will be issued to all legacy benefit types, apart from ESA claimants, over the next six months.
The National Audit Office said almost all of those who failed to claim Universal Credit after being told their legacy benefit is being stopped are on tax credits. In a report, the NAO said the DWP had sent almost 350,000 migration notices advising legacy benefit claimants they need to apply for Universal Credit if they want to keep receiving financial support by the end of December 2023.
DWP had closed almost 150,000 of these migration cases, with more than one in five – more than 31,000 – closed cases resulting in the claimant having their legacy benefits stopped and not moving to Universal Credit. The NAO said: “DWP does not fully understand why some people on legacy benefits do not claim UC.
“It is monitoring the proportion of people who do not claim after receiving a migration notice and considers that the non-claim rate is not a cause for concern as it has received few complaints. However, DWP lacks data to be sure that people are claiming the benefits they are entitled to.”
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