Universal credit switch will leave up to 900,000 benefit claimants worse off

Plans to resume moving benefit claimants over to universal credit after a two-year pause have been branded a “stealth cut” by anti-poverty campaigners.

All claimants will be moved over to universal credit by the end of 2024, the Department for Work and Pensions (DWP) announced this week.

The plans mean 2.6 million people still on so-called “legacy benefits” will be transferred onto the newer, universal payment, and the DWP admits that up to 900,000 of them will be worse off long-term.

Of those 900,000 people, 300,000 claim tax credits and 500,000 are sick and disabled people on the benefit employment and support allowance (ESA).

They will receive transition payments to ensure their income does not fall overnight, but they will then have their benefits effectively frozen every April, as the transition payments will deplete each year when universal credit rises with inflation.

Others will lose out on transition payments completely if they have a change of circumstances, such as a house move, or a new job.

The managed migration scheme was put on hold due to the coronavirus pandemic, but has now been rebooted. Those on working tax credits will be targeted first, sparking fears among the 1.7 million claimants – most of whom are disabled or long-term sick – that they will be pushed into hardship. 

The government states that those on legacy benefits will now benefit from a “modern, digital system” and “one-to-one tailored support”, but campaigners have previously warned that the benefit and the five-week wait for a first payment is linked to deeper poverty, food bank use and soaring rent arrears.

In 2019, experts told the DWP moving people from legacy benefits onto universal credit risked letting them “fall between the cracks and suffer hardship”.

Legacy claimants will be sent a ‘migration notice’ with a three-month deadline to make a claim for universal credit, otherwise their benefits will be cut off.

Marc Francis, Z2K’s policy and campaigns director, told The Big Issue: “DWP’s announcement that the Transitional Protection for those people moved over onto Universal Credit via its managed migration process will be eroded is yet another stealth cut. 

“It will leave hundreds of thousands of vulnerable disabled people who are already struggling with the current cost of living crisis even more out of pocket in future.”

An activist and claimant, who goes by the name of Ben Claimant, told The Big Issue: “I am really worried, not just for me, but for over a million people who are eventually set to lose out financially.

“Disabled people, along with single parents, carers, and other groups of vulnerable people, are set to lose even more income due to the transition.

“This is bad in any circumstances, but in the midst of a cost of living crisis, and after most have lived for two years through the Covid lockdown without any extra financial support (and years before that with benefit freezes), this is a terrible situation to put people in that will only add to their anxiety and stress.

“I really worry that some people will fall through the cracks – and at worst people will die prematurely.”

In November, the High Court heard how the government went against the European Convention on Human Rights when it refused to give the two million people claiming so-called legacy benefits the same £20-per-week increase as those on Universal Credit at the start of lockdown.

In a statement, work and pensions secretary Thérèse Coffey said: “Over five million people are already supported by universal credit. It is a dynamic system which adjusts as people earn more or indeed less, and simplifies our safety net for those who cannot work.

“Parliament voted to end the complex web of six legacy benefits in 2012, and as this work approaches its conclusion we are fully transitioning to a modern benefit, suited to the 21st century.”