Households on six legacy benefits to be replaced by Universal Credit have been warned after thousands missed their payments.
New government figures show 180,120 benefit claimants lost out by not switching to Universal Credit in a crucial three-month period.
Welfare rights groups called the figures “truly alarming” and issued fresh warnings amid fears that hundreds of thousands more claimants could risk their benefits in the coming months.
Two million Inheritance Benefit claimants are being phased into Universal Credit under a process called managed migration.
Universal Credit was created to replace Legacy Benefit and will be launched in November 2022, following a successful pilot in July 2019.
As part of the process, households entitled to Inheritance Benefits, including Tax Credit, are sent “migration notices” in the post telling them how to switch to Universal Credit, as it is not automatic.
It is very important that households apply for Universal Credit within three months of receiving their managed migration letter.
Failure to do so may result in termination of benefits.
Since March 2024, the Department for Work and Pensions (DWP) has sent out around 824,050 migration notices.
However, according to the latest figures from the DWP, 184,120 individuals lost their benefits after failing to comply with migration notices received between July 2022 and March 2024.
Since then, around 400,940 individuals have successfully applied for Universal Credit, and a further 238,990 are still in the process of switching.
Ayla Ozmen, director of policy and campaigns at anti-poverty charity Z2K, says: “Despite repeated warnings from councils and anti-poverty organisations, the DWP continues to cut people off from the support they are entitled to.
“And far from a cautious approach, from later this year it is speeding up the move to Universal Credit, which provides work and support benefits for the seriously ill and disabled.
“So if you receive a migration notice, it’s vital you act.
“Either make a claim to Universal Credit or tell the department you need more time.
“If you’re not sure how to claim, or are worried about how Universal Credit works, find a local advice agency to help you. But whatever you do, don’t ignore it.”
What is managed migration?
TIP from Ayla Ozmen, director of policy and campaigns, anti-poverty charity Z2K.
The DWP is ending so-called ‘inheritance benefits’ for people of working age.
This means you won’t be able to claim benefits such as Income-Related Work and Support Allowance, Income Support, Tax Credits or Housing Benefit (unless you’re in temporary accommodation or supported housing).
Instead, you should claim Universal Credit.
The DWP sends everyone receiving these benefits a letter called a ‘migration notice’ which gives you three months to claim Universal Credit.
If you don’t claim and ask the DWP for more time, your inheritance benefits may stop, even if you don’t get Universal Credit either.
That means you may have nothing to live on, and you’re at risk of racking up debt on important bills like rent.
If you leave it too late to claim Universal Credit, you won’t be ‘paid back’ the gap either.
And you can also skip something called a transition element.
Some people, including many disabled people, get less under Universal Credit than under Inheritance Benefit.
The transitional element means you won’t face a sudden drop when you move to Universal Credit under a managed migration, but instead it falls over time.
But if you ignore your migration notice and later claim Universal Credit, it will be treated as a brand new claim, so you don’t get a transitional element.
Alison Garnham, Chief Executive of the Child Poverty Action Group, said: “Today’s ‘no claim’ numbers are truly alarming. Claimants are losing the money they need while the DWP is burying its head in the sand.
“The department needs to slow down the managed migration to UC and put in place robust support mechanisms to enable people to move safely to UC.
“Without action from the DWP, this is a disaster in the making.”
Experts have previously warned that managed migration poses a risk to vulnerable people who face the loss of money.
Leading charities, including Mind, The Trussell Trust, Turn2Us and the Money and Mental Health Policy Institute, said in 2022 that around 700,000 people with mental health problems, learning disabilities and dementia could struggle to get into the process.
More than 20 organizations have called on the government to end managed migration to fix flaws in the system that could put people at risk.
MANAGED MIGRATION PROCESS
In January, the government announced the number of migration notices it plans to send out in the coming financial year.
Until this date, the focus was only on sending migration notices to households claiming tax relief.
However, 110,000 income support claimants and another 120,000 housing benefit claimants started receiving their letters in April.
More than 100,000 Housing Benefit claimants alone will then be contacted in June.
More than 90,000 people claiming Employment and Support Allowance (ESA) along with Child Tax Credit will start claiming the switch from July.
Meanwhile, 20,000 Jobseeker’s Allowance (JSA) claimants will be contacted from September.
The Sun previously reported that from August those claiming tax relief who are over the state pension age will be asked to apply for either Universal Credit or Pension Credit.
It was originally planned that those claiming only earnings-related ESA would not be transferred until 2028.
However, the DWP put forward plans to move these households onto Universal Credit by the end of 2025.
From September 2024, 800,000 households will start receiving letters explaining how to switch from ESA to Universal Credit.
HELP APPLY FOR A CONSENT LOAN
As well as benefit calculators, anyone switching from Tax Credits to Universal Credit can find help in a number of ways.
You can visit your local Jobcentre by searching find-your-nearest-jobcentre.dwp.gov.uk/.
There is also a free service called “Request Help from Citizen’s Advice”.
- England: 0800 144 8 444
- Scotland: 0800 023 2581
- Wales: 08000 241 220
You can also get help online from advisers at citizensvice.org.uk/about-us/contact-us/contact-us/help-to-claim/.
Would I be better off with Universal Credit?
The government estimates around 1.4 million would be better off with Universal Credit.
A further 300,000 will see no change in payments, while around 900,000 will be worse off under Universal Credit.
About 600,000 of these are expected to receive additional payments if they move under managed migration, so they don’t lose cash immediately.
The majority of them, around 400,000, claim Employment Support Allowance (ESA).
About 100,000 are on tax concessions, while less than 50,000 each are expected to be affected on other inheritance concessions.
Examples of those who may be less entitled to Universal Credit, according to the government, include:
- Households who receive ESA and who receive Severe Disability Allowance and Extended Disability Allowance
- Households with fewer disabled children increase inheritance benefits
- Self-employed households subject to minimum income tax after the end of the 12-month grace period
- Working households that worked a certain number of hours (eg, single
- parent works 16 hours claiming working tax credits
- Households receiving tax relief with savings of over £6,000 (and up to £16,000)
- But they could miss out on any further benefit increases and see a freeze on payments.
Those who voluntarily move and are worse off will not receive these extra payments and may lose the cash.
Those who miss the deadline and file later may also not receive this transitional protection.
The clock starts a three-month countdown from the date of the first letter, and reminders are sent via mail and text message.
After that, there is a one-month grace period during which any claim to Universal Credit is deferred and transitional protection can still be granted.
The most recent figures from the DWP show that 61,130 individuals have made a claim for UC and 39,920 have been granted transitional protection.
Another 40,540 are still in the process of transitioning to the new benefit.