The Department for Work and Pensions is beginning the process of transferring 2.6 million people to Universal Credit (UC)
The transfer to Universal Credit is complicated, says Paul Lewis
The Department for Work and Pensions is beginning the process of transferring 2.6 million people to Universal Credit (UC). It admits 900,000 of them will end up worse off. All these people receive older benefits: tax credits, housing benefit, income support or means-tested
versions of Jobseeker’s Allowance and Employment & Support Allowance. By the end of 2024 they will all have moved, and these old, so-called “legacy benefits” will disappear.
Most of those on older benefits will be entitled to more money on UC, and can make the move whenever they choose, simply by claiming it. However, benefits experts say this could be a bad move even if, in theory, they would get more. UC is paid monthly, which may be difficult for people used to the weekly or fortnightly payments of the older benefits. Also, UC is designed for people who are, or could be, capable of work, and they have to sign a “claimant commitment” to look for it for many hours every week. Many of those on older benefits are disabled and some are not able to earn their own living.
The group who should definitely not move voluntarily are the 900,000 whose entitlement would be less. At some point the DWP will make them move, and that will trigger “transitional payments” to top up their new, lower UC to the amount they got before the move. These payments will be lost if their circumstances change, and next April the amount will not rise with inflation. No transitional payment is made for those moving voluntarily.
There is no certain way to test if you will be better or worse off on Universal Credit. The DWP recommends three online benefit calculators, including entitledto.co.uk, but even then it is often difficult to be sure. And once you’ve moved to UC, you cannot go back.
For advice, try advicelocal.uk, or contact turn2us.org.uk. The rules are very complicated, and benefits specialists are concerned that many
people will make wrong – and irreversible – choices, so get all the information you can.
Paul Lewis presents Money Box on Radio 4. QUESTIONS? Send any questions to Paul.Lewis@radiotimes.com. Paul cannot answer you personally, but he will reflect them in his column.