DWP warning as thousands have benefits stopped after Universal Credit shake up

28 February 2024 , 09:37

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The DWP is currently moving those claiming legacy benefits over to Universal Credit (Image: Getty Images)

Thousands of benefit claimants have had their payments stopped after a Universal Credit shakeup.

The Department for Work and Pensions (DWP) is currently working to move those claiming legacy benefits - such as Tax Credits, Jobseekers Allowance, and Income support - onto Universal Credit. According to a recent report from the National Audit Office (NAO), nearly 350,000 managed migration notices were sent to legacy benefit households telling them to apply for Universal Credit if they wanted to continue receiving financial support by the end of 2023.

However, the NAO found that more than one in five people on Tax Credits who were invited to move to Universal Credit did not make a claim and had their benefits stopped. Of the 148,700 closed cases, 31,500 (21%) resulted in households having their legacy benefit stopped without moving to Universal Credit.

According to the report, the “DWP does not fully understand why some people on legacy benefits do not claim universal credit.” However, earlier studies from the DWP found that there were "real and perceived barriers" to claiming. This included "people believed that the migration notice did not apply to them, that they would not be eligible for universal credit due to a recent change in circumstances, or that they would be moved automatically.”

Gareth Davies, head of the NAO said the DWP was "on track" to move legacy benefit claimants to Universal Credit. But it needed to be "sure people who have not switched to Universal Credit are receiving the benefits to which they are entitled."

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He added: “Work to evaluate the impact of Universal Credit on the labour market shows some positive impact. However, DWP cannot demonstrate it is achieving the scale of the benefits set out in the programme’s business case. The department needs to continue to develop its assessment of the impact to provide assurance on value for money and secure the best results when Universal Credit is fully implemented.”

A DWP spokesperson said: "The vast majority of Tax Credit claimants have successfully moved to Universal Credit, accessing the vital safety net provided to millions as they build towards financial independence."

"As the NAO recognised, evidence shows Universal Credit is having a sustained positive impact on the jobs market, and people on Universal Credit are more likely to be in work six months after making a claim. There is also a range of support available to help people move, including extensions for those who need extra support."

As of March last year, the NAO said around 2.2 million households were still getting old benefits and by December around 6.3million people were claiming Universal Credit. As the rollout continues, the DWP estimates that around 900,000 households will be moved over to Universal Credit before the end of December 2024.

What should I do if I receive a managed migration notice?

The DWP is rolling out the move gradually and is currently sending managed migration notices through the post to areas next in line. The majority of those claiming legacy benefits are expected to have been moved over by March 2025 however people claiming income-related ESA only and not Tax Credits have a slightly longer deadline and will be transferred across by 2028.

Once you receive your notice you will have three months to put a claim in for Universal Credit - if you don't your payments will stop. You can put in your claim online, or over the phone by calling the Universal Credit Migration Notice helpline on 0800 169 0328, or you can also ask your local Job Centre.

Once you have made your claim, you will have to wait five weeks until your first Universal Credit payment and you will continue to receive it going forward - unless your circumstances change. If you claim Tax Credits your entitlement will end as soon as you claim Universal Credit.

Top up payments will be made available to people who will be worse off claiming Universal Credit and you can check how the move will affect you using an online benefits calculator. The three benefit calculators recommended by the DWP include: