Appearing on BBC Radio 5 Live’s Wake Up to Money show, IncomeMax managing director Lee Healey spoke to presenter Felicity Hannah about this week’s move from the Department for Work and Pensions [DWP] to switch 2.6 million legacy benefit claimants over to Universal Credit by the end of 2024 and how it could affect benefit recipients.
Currently in the UK, an estimated 2.6 million people continue to receive pre-existing legacy benefits which are means tested to determine entitlement. These include benefits such as income support, income-based jobseeker's allowance, income-related employment support, and working-age housing benefit.
From May 9, the DWP is resuming the process of switching recipients of legacy benefits over to receiving Universal Credit in a managed move of claimants. However, numerous welfare charities and organisations are concerned around the move that it could leave many vulnerable people worse off.
Explaining the changes, Healey outlined: “Basically, what the Department of Work and Pensions [DWP] are now doing is resuming that process of switching people from those legacy benefits onto Universal Credit. This is called a managed move of claimants because some people could miss out and some people could see higher entitlement. So, the DWP needs to manage these moves very carefully. It's not a big switch, it's a gradual switch. DWP want to see all those claimants who are currently getting those legacy benefits on Universal Credit by the end of 2024.
“If you're receiving working-age housing benefit for instance, then that will be one of those benefits that will form part of this managed move. The big thing to be thinking about is that this isn't just an automatic switch; it's going to start quite slowly and the DWP will gradually get in touch with people and there are three different ways that you can end up on Universal Credit from legacy benefits. These are natural migration where people simply must start claiming because their circumstances make it so; voluntary migration where the DWP say you can choose to claim Universal Credit at any time if you want to; and then the difficulty lies in the last one which is managed migration where the DWP contact you and then help you go through that process and then you have three months to make the switch.”
However, the benefits payments that an individual receives are dictated by how benefits are calculated and as part of the switch, some will be entitled to higher payments, and some will lose out by being entitled to fewer.
In the case of those whose benefits entitlements will reduce, Healey explained that there are transitional financial protection elements included which the claimant needs to fill out the relevant information for in order to receive them.
Healey said: “It is under managed migration that transitional financial protections can be included in your benefits payments as you make the move, and people need to be aware of that before going through that process.
“The DWP estimates that 1.4 million people should have a higher entitlement and 300,000 will have no change. However, 900,000 could have a lower entitlement and therefore need to wait for the managed migration process in order to have transitional financial protection elements added into your Universal Credit.
“One such protection is the severe disability premium for which there is a special process. You can have that that as long as you meet special requirements and have that included in your transition protections, but it is all incredibly complicated and stressful for people who obviously want to know if they should be moving now off their own back or waiting for that latter from DWP.”
While ministers are encouraging people affected to take to online benefits calculators and other services, Healey pointed out that there are other means of seeking the necessary help and advice.
“The government is encouraging people to use benefit calculators and do online checks, but there is a help-to-claim service that DWP funds which is delivered through Citizens Advice and Citizens Advice Scotland where you can get help from. Otherwise, there are lots of welfare benefits advisors dotted around the UK and your local authority probably has one of these. Sometimes it is not as simple as just knowing and understanding and you do need to go into detail and have someone to advise you so that you know where to stand because it is complex. This won't be a perfect process and just getting that advice and trying to understand your situation and making sure that you don't miss out on anything you are entitled to is important.”
Given the complexities around the process, Healey moved to reassure that the DWP’s gradual management of the transition should ensure that claimants are properly advised and supported to ensure that nobody suddenly experiences a drastic loss of benefit income.
“I understand why charities and other organisations are concerned about this process. A lot of these claimants can be quite vulnerable people who are often disengaged with government processes and might not be aware of what’s happening or really understand what they need to do.
“The DWP says it is going to make sure claimants are fully supported and initial volumes of people moving through the process will be small and controlled so that there can be enough support in place to make sure we don’t see anyone facing real hardship. So, we are just keeping our fingers crossed.”
Listen to the full interview with IncomeMax’s Lee Healey on BBC Radio 5 Live’s Wake Up to Money show here.
Photo by Towfiqu barbhuiya on Unsplash
