Benefits claimants are being warned that hundreds of thousands of people have had their benefits stopped due to a large-scale migration process.
DWP Update: Key Figures in Legacy Benefits Transition to Universal Credit
The Department for Work and Pensions (DWP) has released an update on the transition from older benefits, like tax credits, to Universal Credit.
Those receiving Income Support, Tax Credits with Housing Benefit, ESA (Income Based) with Child Tax Credit, or JSA have been sent letters informing them that they need to reapply for Universal Credit. If they fail to do so, their benefits will be discontinued.
From July 2022 to June 2024, the Department for Work and Pensions (DWP) mailed migration notices to 1,140,810 people in 771,810 households. Out of these, 623,310 people applied for Universal Credit (UC), and 232,800 households were granted transitional protection. Another 232,830 are still working through the transition to UC.
Unfortunately, 284,660 people who received migration notices didn’t apply for UC and had their legacy benefits stopped. This means that, as of the end of February 2024, 32% of those who got a migration notice didn’t make a UC claim and lost their benefits, while 68% did apply for UC.
Concerns Raised Over Universal Credit Transition
There’s been worry that some people, especially those who are vulnerable, might not understand that they need to act, leading them to miss out on important financial support. MPs in the House of Commons have raised concerns about this process, fearing that people could be losing money they’re entitled to because they have to make a new application.
The Institute for Fiscal Studies (IFS) looked into how the switch to UC is affecting about eight million people and found that some are potentially missing out on around £4,000 because of the transition.
Households with one adult over state pension age and one adult under it are struggling more under Universal Credit (UC) compared to the old benefit system. The Institute for Fiscal Studies (IFS) found that these households are losing more than £4,000 a year because they’re now on UC instead of the more generous pension credit. About 70% of these households—around 180,000 in total—are facing this shortfall. Those with assets over £16,000 and self-employed people are also seeing significant losses under UC.
The report does show some positive aspects too. Couples with children are generally better off under UC. About 72% of them gain at least £200 a year, while only 22% lose that much. Working families and renters also tend to benefit more from UC, since the system reduces benefits more slowly as their earnings go up.
Earlier this year, it was mentioned in the House of Commons that people might be missing out on around £3,200 a year by not switching their benefits. It’s estimated that about a quarter of those affected haven’t made the switch yet.