Exact date key benefit will be scrapped in Universal Credit shake-up up revealed in Budget
Date: 2024-11-01A MAJOR Department for Work and Pensions benefit will be scrapped two years sooner than expected.
The government has confirmed that it is speeding up the process of axing income-related employment and support allowance (ESA).
Households currently receiving income-related ESA are being encouraged to transition to Universal Credit.
ESA provides financial support for those unable to work due to illness or disability.
Initially, all ESA claimants were expected to be transferred to Universal Credit by the end of 2028.
Universal Credit was set up to replace legacy benefits, including income-related ESA.
However, in her Autumn Statement, Rachel Reeves confirmed that all income-related ESA claims will now end by April 2026.
The Budget documents added: “This move will bring more people into a modern benefit regime, continuing to ensure they are supported to look for and move into work.Â
“Around half of ESA claimants will receive more financial support on UC, while others will receive transitional protection to ensure nobody is worse off at the point at which they move over to UC.”
This means that from 2026, households will no longer be able to renew their income-related ESA claims.
These households must switch to Universal Credit, or their payments will stop.
The push to move all two million claimants on legacy benefits to Universal Credit by the end of March 2025 is taking place through a process known as managed migration.
As part of this process, households on legacy benefits receive “migration notices” by post.
These notices provide instructions on how to switch to Universal Credit, as the transition is not automatic.
Households must apply for Universal Credit within three months of receiving their managed migration letter.
Failing to do this can result in benefits being stopped.
Hundreds of thousands of households on tax credits, income support, housing benefit and income-based jobseeker’s allowance (JSA) will have to switch before April 2025.
Which benefits are stopping?
UNIVERSAL Credit is replacing six benefits under the old welfare system, commonly called legacy benefits. They are:
- Working tax credit
- Child tax credit
- Income-based jobseeker’s allowance
- Income support
- Income-related employment and support allowance
- Housing benefit
If you’re on any of these benefits now, you can move over immediately or wait until you receive your migration notice.
You should carefully consider the financial implications of transitioning to Universal Credit before receiving a formal notice, as once you make the switch, there is no option to revert to your previous benefits.
An online benefits calculator, free and easy to use from charities such as Turn2Us and EntitledTo, can help you check.
You may also be moved to Universal Credit if your circumstances change, such as moving home, changing your working hours, or having a baby.
Ultimately, everyone will be transitioned to Universal Credit through the managed migration process, and all legacy benefits will be phased out by 2025.
MANAGED MIGRATION PROGRESS
In January, the government announced the number of migration notices it plans to send out in the coming financial year.
Before this date, the focus was sending migration notices to households claiming tax credits only.
However, 110,000 income support claimants and a further 120,000 claiming tax credits with housing benefit started receiving their letters in April.
Over 100,000 housing benefit-only claimants were contacted in June.
More than 90,000 people claiming employment and support allowance (ESA) along with child tax credits were asked to switch in July.
In August, those claiming tax credits who are over state pension age were asked to apply for either Universal Credit or pension credit.
Since September, 20,000 claimants on jobseekers allowance (JSA) have been asked to switch.
Around 800,000 households have also started receiving letters explaining how to move from income-related ESA to Universal Credit.
A WORD OF WARNING
Since July 2022, the Department for Work and Pensions (DWP) has sent nearly 1.14million migration notices.
However, according to the latest figures from the DWP, 284,660 individuals lost their benefits after failing to respond to migration notices received between July 2022 and June 2024.
That’s why it’s vital to ensure that you switch to Universal Credit within three months of receiving your letter.
Failure to do this will stop your current benefit payment.
You will also forfeit transitional protection top-up payments designed to ensure you do not lose money when transitioning to Universal Credit under the managed migration process.
Some 623,310 individuals have since made successful claims for Universal Credit, and another 232,830 are still in the process of transitioning.
HELP CLAIMING UNIVERSAL CREDIT
As well as benefit calculators, anyone moving from tax credits to Universal Credit can find help in a number of ways.
You can visit your local Jobcentre by searching at find-your-nearest-jobcentre.dwp.gov.uk/.
There’s also a free service called Help to Claim from Citizen’s Advice:
- England:Â 0800 144 8 444
- Scotland:Â 0800 023 2581
- Wales:Â 08000 241 220
You can also get help online from advisers at citizensadvice.org.uk/about-us/contact-us/contact-us/help-to-claim/.
Will I be better off on Universal Credit?
ANALYSIS by James Flanders, The Sun’s Chief Consumer Reporter:
Around 1.4million people on legacy benefits will be better off after switching to Universal Credit, according to the government.
A further 300,000 would see no change in payments, while around 900,000 would be worse off under Universal Credit.
Of these, around 600,000 can get top-up payments (transitional protection) if they move under the managed migration process, so they don’t lose out on cash immediately.
The majority of those – around 400,000 – are claiming employment support allowance (ESA).
Around 100,000 are on tax credits, while fewer than 50,000 each on other legacy benefits are expected to be affected.
Those who move voluntarily and are worse off won’t get these top-up payments and could lose cash.
Those who miss the managed migration deadline and later make a claim may not get transitional protection.
The clock starts ticking on the three-month countdown from the date of the first letter, and reminders are sent via post and text message.
There is a one-month grace period after this, during which any claim to Universal Credit is backdated, and transitional protection can still be awarded.
Examples of those who may be entitled to less on Universal Credit include:
- Households getting ESA and the severe disability premium and enhanced disability premium
- Households with the lower disabled child addition on legacy benefits
- Self-employed households who are subject to the Minimum Income Floor after the 12-month grace period has ended
- In-work households that worked a specific number of hours (e.g. lone parent working 16 hours claiming working tax credits
- Households receiving tax credits with savings of more than £6,000 (and up to £16,000)
Either way, if these households don’t switch in the future, they risk missing out on any future benefit increase and seeing payments frozen.
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