The Department for Work and Pensions (DWP) is in the process of sending final notifications to benefit recipients who will be transitioning to Universal Credit. Universal Credit has replaced various older benefits for many households across the UK, such as Tax Credits, Income Support, income-based Jobseeker’s Allowance, and Housing Benefit.
While most individuals have already migrated to Universal Credit, there are still some beneficiaries receiving income-related Employment and Support Allowance (ESA) who will be transferred over, with the remaining recipients expected to be contacted by September 2025. The DWP aims to complete the “managed migration” to Universal Credit by March 2026, with notifications being sent out to those who have not yet transitioned.
It is crucial to note that a three-month deadline will be provided to switch to Universal Credit; failure to do so will result in the cessation of existing benefits. The DWP states that 55% of claimants will see an improvement in their financial situation with Universal Credit, while 35% may experience a decrease. Those facing reduced benefits will receive monthly transition payments to offset any shortfall until their award aligns with their previous benefits.
Transition payments will continue until there is no discrepancy between the new Universal Credit amount and the previous benefits received. However, to receive these transitional payments, individuals must wait for the managed migration process to move them over. It is essential to be aware that there is a five-week waiting period for the initial Universal Credit payment, although certain legacy benefits, like income-related ESA, may provide a two-week “run on” period to help bridge the gap.
Universal Credit comprises a standard allowance, which serves as the base amount before factoring in additional elements like childcare or incapacity for work. For individuals who are employed, there is a taper rate that reduces the Universal Credit payment as earnings increase, with a deduction of 55p for every £1 earned. Some individuals may qualify for a work allowance, allowing them to earn a specified amount before their Universal Credit is reduced, set at £411 per month for those receiving housing support and £684 per month for others.