What is Universal Credit and how it can affect you?Back to top
What is Universal Credit?
Universal Credit is a payment to help with your living costs. It’s normally paid monthly but some claimants can have it paid more frequently.
You may be able to get it if you’re on a low income, out of work or you cannot work.
If you already get other benefits
Universal Credit will replace the following benefits by the end of 2024:
- Child Tax Credit
- Housing Benefit
- Income Support
- Income-based Jobseeker’s Allowance (JSA)
- Income-related Employment and Support Allowance (ESA)
- Working Tax Credit
If you currently get any of these benefits, you do not need to do anything at the moment unless:
- you have a change of circumstance that you need to report
- you get a letter entitled ‘Migration Notice’ telling you that you must start to claim Universal Credit (see Managed Migration section)
If you get tax credits, they will stop when you or your partner applies for Universal Credit.
If you have a change of circumstances that means you have to move to Universal Credit, this is called ‘Natural Migration’.
As has been the case since Universal Credit was first introduced, when a claimant experiences a change in circumstances (for example, a change in employment status or family situation), they need to make a new claim for a benefit that Universal Credit has replaced and they will “naturally” migrate onto Universal Credit.
You may be able to get Universal Credit if you’re on a low income or need help with your living costs. You could be working (including self-employed or part time) or be out of work.
To claim you must:
- live in the UK
- be aged 18 or over (there are some exceptions if you’re 16 to 17)
- be under State Pension Age
- have £16,000 or less in money, savings and investments
Claimants moving to Universal Credit will receive a two-week run-on of their Income Support, Income-Based Jobseeker’s Allowance, or Income-Related Employment and Support Allowance. Those moving from Housing Benefit will receive a two-week Transition to Universal Credit Housing Payment.
You can find lots more information about Universal Credit here:
- Universal Credit: What Universal Credit is – GOV.UK (www.gov.uk)
- Get assistance with making a claim
- Tax credits are ending – Understanding Universal Credit
- Completing the move to Universal Credit – GOV.UK (www.gov.uk)
What is Universal Credit Managed and Voluntary Migration?
All benefit claimants will be moved over to Universal Credit by the end of 2024.
The process was temporarily halted due to COVID 19, but resumed on 9 May 2022 and will be a gradual process to start with. Claimants will be notified of when they will be asked to move to Universal Credit so as to complete the process by 2024.
Everyone moving over from legacy benefits will have their entitlement to Universal Credit assessed against their current claims, with top up payments available for eligible claimants whose entitlement would have been reduced because of the change – ensuring they receive the same entitlement as on a legacy system. These will continue unless their circumstances alter.
Although notifications will be gradually sent out across the country, people who are currently claiming legacy benefits do not have to wait to be moved to Universal Credit.
Anyone who thinks they will be better off can move straight away, however, we strongly recommend that any of our customers who are thinking of moving over voluntarily seek specialist welfare benefit advice before doing so. This is because although many people will be better off, there are still some who may lose money or their right to transitional protection (see below). This process is called Voluntary Migration.
The managed migration has commenced for large parts of the country. Look out for leaflets from HMRC or DWP advising when your area will be included.
If you have been selected, you will be asked to claim Universal Credit in a letter entitled ‘Migration Notice’.
This letter will inform you that your existing benefits or tax credits will be ending, and the date you must claim Universal Credit by.
You will have three months to claim Universal Credit from the date of your Migration Notice letter.
What is Transitional Protection?
Parliament has committed to providing transitional financial protection for those who are moved onto Universal Credit but only through the managed migration process. Transitional protection does not apply to those who naturally or voluntarily migrate.
This means those eligible households with a lower calculated award in Universal Credit than their legacy benefits awards will see no difference in their entitlement at the point they are moved to Universal Credit, provided there is no change in their circumstances during the migration process. The transitional protection element will decrease over time with increases in Universal Credit elements – excluding the childcare costs element – and will stop with certain changes of circumstances.
The Government has also provided additional protection for those who had a change in circumstance and have been receiving Severe Disability Premium.
In addition, all new claimants and those migrating from tax credits who are gainfully self-employed will be eligible for a 12-month start-up grace period before the Minimum Income Floor applies, to help them grow their business.
It is important to remember that once a new claim to Universal Credit is made, households cannot go back to their previous benefits. If an individual’s circumstances would mean their Universal Credit payments would be less than what they currently receive in benefits, they should wait to be moved through Managed Migration. This is because transitional protection is only available through that process.
You can find further information about this process along with some examples of who may be better off on Universal Credit here – Completing the move to Universal Credit – GOV.UK (www.gov.uk)
Please remember that anyone who thinks they will be better off can move straight away, however, we strongly recommend that any of our customers that are thinking of moving over voluntarily seek specialist welfare benefit advice before doing so, as although many people will be better off, there are still some who may lose money or their right to transitional protection.
Help with your council tax
If you pay your own council tax, you may be able to get help with your bill through your local council tax support scheme, or may qualify for an exemption or discount.
Counciltaxhelp is a website designed to help you find details of the support available to you locally; national information about your rights and entitlements; and details of independent advice organisations in your area who can help you get the support that you need.
Simply visit the website and enter your postcode to find out more.