Thousands of households in the UK on benefits have been warned that they must act quickly or face losing their payments. The government plans to move all claimants to Universal Credit by March 2025 in a process called managed migration. Households in Greater Manchester, East Riding, and North Yorkshire are among the first to receive letters instructing them to move to Universal Credit, with just over a week left to do so. Failure to comply within the allocated time frame could result in benefit payment loss.
Important Deadline Approaching
Households on tax credits in Greater Manchester, East Riding, and North Yorkshire were sent letters in June notifying them of the move to Universal Credit. These households have until the end of September to make the switch. Failure to do so within the three-month period could lead to a loss of benefit payments. Some regions have already completed the transition, and the process will continue across the UK, with Central Scotland and Southeast Wales households being notified in October.
Most Individuals Will Benefit from the Switch
The majority of the two million people still on legacy benefits are expected to be better off after transitioning to Universal Credit. However, around 300,000 individuals could be worse off and should wait until asked to make the move in order to protect their payments. If an individual's Universal Credit payment is lower than their legacy benefits entitlement, they may be eligible for a top-up payment called Transitional Protection. It's important to note that once a person is on Universal Credit, they cannot switch back to tax credits.
Understanding Universal Credit
Universal Credit is a welfare scheme that combines various old "legacy benefits" into a single monthly payment. To be eligible, individuals must be on a low income or out of work, be at least 18 years old, be below State Pension age, have £16,000 or less in savings (between themselves and their partner), and live in the UK.
Universal Credit payments consist of a standard allowance and additional payments based on individual circumstances. The standard monthly allowances are as follows:
- Single, under 25: £292.11
- Single, 25 or over: £368.74
- Couple, both claimants under 25: £458.51 (combined)
- Couple, one or both claimants 25 or over: £578.82 (combined)
Additional amounts may be available for those with children or disabilities. For example:
- First child born before April 6, 2017: £315
- Child born on or after April 6, 2017 (or second and subsequent child): £269.58
- Disabled child, lower rate: £146.31
- Disabled child, higher rate: £456.89
- Capability for work, limited: £146.31
- Capability for work or work-related activity, limited: £390.06
- Carer for a severely disabled person (35 hours/week): £185.86
Claimants may also qualify for an increased work allowance, depending on their circumstances.
Seeking Advice and Taking Action
If you receive a managed migration notice or are considering moving from tax credits to Universal Credit, it is important to carefully assess how it will affect your finances. Online benefits calculators from organizations like Turn2Us and EntitledTo can help you compare your options, and they can also provide advice on the best course of action.
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