The UK’s Department for Work and Pensions (DWP) is making significant changes to the benefits system, replacing legacy benefits with Universal Credit. This phased migration will affect millions of people, including those receiving benefits like Housing Benefit, Income Support, and Tax Credits. Here’s what you need to know to prepare for the transition.
What’s Changing?
Several existing benefits, known as legacy benefits, will be gradually replaced by Universal Credit. These include:
- Housing Benefit
- Income-related Employment and Support Allowance (ESA)
- Income-based Jobseeker’s Allowance (JSA)
- Child Tax Credit
- Working Tax Credit
- Income Support
The DWP plans to complete this transition by March 2026. Claimants will receive a “migration notice” by post, giving them three months to apply for Universal Credit.
Not Switching
Failing to switch within the given timeframe will result in your current benefits being stopped. Once you’ve transitioned to Universal Credit, you cannot return to your previous benefits, making it vital to carefully assess your options before applying.
How to Prepare?
Preparation is key to ensuring a smooth transition. Here are some steps to take:
- Use Online Calculators: Websites like Policy in Practice, Entitledto, and Turn2Us offer free tools to estimate how the transition to Universal Credit may affect your finances.
- Seek Professional Advice: Support services like Citizens Advice or Turn2Us can provide tailored guidance to help you know the changes and how to navigate the process.
- Review Your Finances: Consider the waiting period for your first payment and plan for any gaps in your income.
Financial Impact
The financial implications of moving to Universal Credit will vary:
- 55% of claimants may see an increase in their income.
- 35% of claimants could be worse off financially.
- The remaining group is expected to see no significant change.
Transitional Payments
If you are worse off after switching, you may qualify for transitional payments, which are designed to cover any shortfall between your previous benefits and your new Universal Credit amount. However, these payments will gradually reduce as your Universal Credit payment increases.
Waiting Period
One challenge for claimants is the five-week waiting period for the first Universal Credit payment. To ease this gap, certain benefits like Housing Benefit, Income Support, ESA, and JSA will continue for an extra two weeks after your claim is approved.
Steps
To minimize disruptions, follow these steps:
- Act Quickly: Once you receive your migration notice, start the application process without delay.
- Prepare for the Waiting Period: Budget for the gap in payments or consider applying for an advance on your Universal Credit.
- Leverage Support Resources: Reach out to organizations like Citizens Advice to ensure you know the full implications of the transition.
The shift to Universal Credit is a major change, but with preparation and the right resources, you can navigate this process effectively. By staying informed and acting promptly, you can minimize financial disruptions and make the most of the new system.
FAQs
Which benefits are being replaced?
Benefits like Housing Benefit and Tax Credits are being replaced by Universal Credit.
When will the migration be completed?
The transition to Universal Credit will be completed by March 2026.
What happens if I don’t switch?
Your current benefits will stop after three months.
How can I prepare for the change?
Use benefit calculators and seek advice from Citizens Advice or Turn2Us.
Is there a waiting period for Universal Credit?
Yes, there is a five-week wait for the first payment, but some benefits continue for two weeks.
