The government is transitioning individuals receiving legacy benefits, including tax credits, to Universal Credit, a move aimed at streamlining the welfare system.
While this change is expected to affect millions of people, the transition will take several years to have all claimants on Universal Credit by the end of 2024.
The Managed Migration process began in May of the previous year, targeting recipients of legacy benefits.
In this transition, households in specific areas across the UK receive notices instructing them on how to shift from their existing benefits to Universal Credit.
In December, the Department of Work and Pensions (DWP) is set to contact households in Berkshire, Buckinghamshire, and Oxfordshire.
Recipients typically have a three-month window to complete their migration; otherwise, they risk losing their current benefits.
Over two million people still receive legacy benefits, and most will likely be better off following the transition.
However, about 300,000 individuals could be worse off, meaning they should only move to Universal Credit once necessary to avoid a potential loss of income.
When recipients move from legacy benefits to Universal Credit, they often become eligible for a top-up payment known as Transitional Protection if their Universal Credit entitlement is lower than their legacy benefit entitlement.
This ensures their income remains at the same level they received under the previous system.
Notably, failure to act upon receiving a migration notice can result in the loss of current benefits.
Transitioning to Universal Credit: Key Tips for Beneficiaries
Additionally, any changes in circumstances before receiving a migration notice may render individuals ineligible for tax credits, prompting them to apply directly for Universal Credit instead.
Recipients must assess their financial situation carefully before making the transition, as it is typically irreversible once they have migrated to Universal Credit.
The government estimates that approximately 700,000 tax credit claimants may experience improved financial outcomes due to the transition.
To make informed decisions, beneficiaries can use online benefits calculators provided by organizations such as Turn2Us and EntitledTo, which offer free and easy-to-use tools.
Seeking advice from these organizations can help individuals understand the implications of moving to Universal Credit.
The Managed Migration process began earlier this year after a successful pilot program in several regions.
Households in numerous areas have already received migration notices, and the DWP aims to reach all tax-credit families across the UK by the end of 2024.
Universal Credit is a comprehensive welfare scheme that combines various “legacy benefits” into a single monthly payment. Individual circumstances, including income, age, and savings, determine eligibility.
Universal Credit payments consist of a standard allowance and additional payments based on individual circumstances.
The amount of the expected budget varies depending on factors such as age and marital status. Recipients may also receive extra charges for children, disability, and caregiving responsibilities.
Source: The Sun