Moving onto Universal Credit from legacy benefits

19 mins read

If you currently claim one of the legacy benefits Universal Credit is replacing, there are three ways in which you could be moved to Universal Credit: your circumstances change; the government asks you to claim Universal Credit as part of the “managed migration” process; or you volunteer to claim because you think you will be better off.

In this article

Introduction

Universal Credit replaces new claims for the following existing means-tested benefits:

These are known as the ‘legacy benefits’.

Other benefits such as Carer’s Allowance, Disability Living Allowance (DLA), Child Benefit and Council Tax Reduction continue to exist as separate benefits.

If you currently claim one of the legacy benefits Universal Credit is replacing, there are three ways in which you could move onto Universal Credit: your circumstances change; the government asks you to claim Universal Credit as part of the “managed migration” process; or you volunteer to claim because you think you will be better off.

This podcast episode looks at the different ways that someone might move onto Universal Credit.
Read a transcript of this podcast.

Volunteering to claim Universal Credit

Some families may choose to claim Universal Credit because they believe that they will receive more in Universal Credit than they currently get in legacy benefits.

Warning! While it is true that some families will be better off on Universal Credit, many families are actually worse off. And once you claim Universal Credit, you cannot revert back to your old legacy benefits. This is the case even if you are left worse off (and even applies if you get a nil award of Universal Credit). Because of this, you should always seek detailed individual advice before making any decision to volunteer to claim Universal Credit.

When your circumstances change

You already get a legacy benefit and a change in circumstances means you want to make a new claim for a different legacy benefit. In this case, you will need to make a claim for Universal Credit. This is known as “natural migration” to Universal Credit.

Not all changes of circumstances will lead to you having to consider a claim for Universal Credit. It’s only changes of circumstances that would have previously led to you making a new claim for a legacy benefit.

It’s up to you whether you claim Universal Credit or not. If you do, any existing legacy benefits you get will have to stop.

Warning! It is always worth getting advice before making a claim. Some people are worse off after claiming Universal Credit, and once you claim it, it is impossible to reverse that decision and reclaim your old means-tested benefits. Get advice before choosing to claim Universal Credit to check that a claim will not leave you worse off.

Common reasons families end up on Universal Credit because of a change in circumstance

  • You’re an existing tax credit claimant but separate from your partner, and your couples’ claim for tax credits ends. Unfortunately, you won’t be able to make a new tax credits claim as a single person. You’ll have the option of claiming Universal Credit instead. Similar rules apply if you claim tax credits as a single person and start to live with a new partner.
  • You are a renter who gets Housing Benefit and you move to a new tenancy in a different council area. Your current Housing Benefit claim ends. In this case, you won’t be able to make a new claim for Housing Benefit from your new council. You’ll have to claim Universal Credit towards the rent at your new tenancy instead. The situation is different if you move to a new tenancy in the same council area. That should count as a review of an existing Housing Benefit claim, so you’ll still receive Housing Benefit at your new address.
  • You’ve been getting income-based Job Seeker’s Allowance and start to get the DLA care component for your child at the middle or highest rate. You may wish to stop job seeking and to claim Income Support as a full-time carer instead. In this case, you won’t be able to make a new claim for Income Support. You can claim Universal Credit as a carer instead if you want.

When you’re selected for managed migration

The government plans to eventually ask all existing legacy benefit claimants to claim Universal Credit instead, even if you have no change in your circumstances. It calls this process “managed migration”.

Managed migration roll-out

Roll-out to “tax credits-only” claimants

The Department for Work and Pensions (DWP) has said that during 2023/24, it hopes to migrate everyone in Great Britain who is a “tax credits-only” claimant onto Universal Credit. Tax credits only claimants are already being sent migration notices in almost parts of the country. This will be extended to the last remaining areas of the country during February.

Northern Ireland

The roll out of managed migration in Northern Ireland started in October 2023. The Department for Communities has said that the process will start with tax-credit only claimants. Claimants will be selected randomly and this will include households from all Northern Ireland postcodes.

Roll-out to claimants of other legacy benefits

By the end of 2024/25, the DWP plans to migrate onto Universal Credit everyone getting:

  • Income Support.
  • income-based Job Seeker’s Allowance.
  • Housing Benefit.
  • Tax credits.

This process started in September 2023. Initially this is only happening in the three areas of Manchester, Northumberland and the London Borough of Harrow but it will be rolled out to other areas during 2024/25.

The DWP plans to start sending migration notices to claimants on other legacy benefits from the following dates:

From April 24 – those on Income Support, and those on tax credits alongside Housing Benefit;

From June 24 – those on Housing Benefit only;

From July 24 – those on income related Employment and Support Allowance alongside child tax credit;

From Sept 24 – those on income based Job Seekers Allowance

People who get income-related Employment and Support Allowance (irESA) only or income-related ESA alongside Housing Benefit will not be asked to migrate until 2028/29.

When happens when you have been selected for managed migration

Once the DWP (Department for Communities in Northern Ireland) selects you to migrate onto Universal Credit, you won’t transfer onto Universal Credit automatically. Instead, you will have to make a claim.

This podcast episode is about what you should do if you receive a managed migration notice from the Department of Work and Pensions telling you that your existing legacy benefits are ending and you need to claim Universal Credit.
Read a transcript of this podcast.

Receiving a migration notice

You’ll receive a “migration notice” in writing that your legacy benefits will be ending.

You’ll receive a date three months from the date on your migration notice within which to make a claim for Universal Credit. This is known as your deadline day. The DWP can extend your deadline day if there are good reasons.

When can I apply for Universal Credit?

It is up to you whether you claim Universal Credit straight away or wait until closer to the deadline day.

If you haven’t claimed Universal Credit by your deadline day, you will have a further month within which to claim Universal Credit. This is your “final deadline day”. So long as you claim before your final deadline day, your Universal Credit claim will be automatically backdated to your deadline day, and you will be eligible for transitional protection. (Although remember: your tax credits will have stopped on the deadline day, with other legacy benefits stopping two weeks later – see below).

If you don’t claim Universal Credit by your final deadline day, you can still claim Universal Credit at a later date, but you will have a longer gap with no benefit payments and you won’t be eligible for any transitional protection.

You’ll normally have to claim for Universal Credit online, but you can also use the Universal Credit Migration Notice helpline if necessary.

When your legacy benefits will stop

Your tax credit payments will stop on the date you claim Universal Credit, or on your deadline day if you haven’t lodged a claim for Universal Credit by then. Any other legacy benefits you get, i.e. Income Support, Housing Benefit, income-based JSA or income-related ESA, will run on for a further two weeks.

So if you claim Universal Credit before your deadline day, any tax credits you get will stop from the day before you claimed Universal Credit. Any other legacy benefits will stop two weeks after the date you claimed Universal Credit.

If you claim Universal Credit after your deadline day, any tax credits will stop from the day before your deadline day. Any other legacy benefits you get will stop two weeks after your deadline day.

Regardless of whether you claim Universal Credit before or after your deadline date, once you have lodged a claim, you will have a wait of at least five weeks before you get your first Universal Credit payment. If this wait causes you financial hardship, you can ask for an advance payment. An advance payment is a loan that you will need to repay to the DWP from your future Universal Credit payments.

Making sure you are no worse off on Universal Credit

So long as you have claimed Universal Credit either by your deadline day or your final deadline a month later, you will be eligible for transitional protection payments. These are supposed to make sure that you are no worse off on Universal Credit. If you don’t claim Universal Credit by your final deadline day, you won’t be considered for transitional protection. This is the case even if you eventually claim Universal Credit at a later date.

Warning! People selected for managed migration have no option but to claim Universal Credit. The situation is different if you have not received a migration notice. There is nothing preventing you from volunteering to move onto Universal Credit before you receive a migration notice. However, this may not be a good idea. People who choose to claim Universal Credit early, rather than waiting to receive a migration notice, cannot usually get transitional protection.

Many families with a disabled child will be worse off under Universal Credit. Once you claim Universal Credit, you cannot move back onto your old legacy benefits. You can check your likely entitlement to Universal Credit using the benefit calculator on our website.

Will I be worse off under Universal Credit?

Many families with a disabled child end up worse off under Universal Credit. This is particularly likely if you are an out-of-work family with a disabled child who does not qualify for the higher disability addition.

This is because the lower rate of the child disability addition is £33.70 per week (£146.31 per month). The equivalent additional payment under the existing benefits system is £74.69 per week. This represents a cut of £40.99 per week, or just over £2,131 per year. Since the child disability addition is for each disabled child, families with two children on the lower addition could lose twice this amount.

You can find out more about this issue in our briefing – Universal Credit and Disabled Children.

Transitional protection

The government has said that it will transitionally protect some existing claimants. This applies only to existing claimants who the government moves onto Universal Credit as part of ‘managed migration‘.

You are not eligible for transitional protection if either:

  • You move onto Universal Credit because you had a change of circumstances (known as natural migration).
  • You volunteered/chose to claim.
  • You missed your final deadline day for making a managed migration claim.

I’ve moved onto Universal Credit via managed migration

You might be able to receive top-up payments to ensure you are no worse off under Universal Credit.

How does transitional protection work?

Transitional protection rules are supposed to ensure that families who would qualify for lower payments under Universal Credit receive top-up payments so that they are no worse off than before. This top-up is known as a transitional element.

The DWP compares the amount you receive under legacy benefits (your “total legacy amount”) with an indicative amount it expects you to get under Universal Credit. If your indicative amount is lower than your total legacy amount, you will receive a transitional element to make up the difference.

Eligibility

In order to be eligible, you need to claim Universal Credit either by:

  • the three-month deadline in your “migration notice”, or
  • the final deadline a month later.

If you do not claim by the final deadline, you will not be eligible for transitional protection. This is so even if you claim Universal credit at some later date.

For example, Sarah receives Child Tax Credit of £900 per month and Housing Benefit of £1,000 per month. Her total legacy amount is therefore £1,900 per month. Her indicative amount is £1,700 per month. So long as she claims Universal Credit after receiving her migration notice but before her final deadline, she will receive a transitional element of £200 pm.

Who won’t be protected?

Unfortunately, it appears that not every family who is worse off on Universal Credit will be transitionally protected. In particular, families who have been getting Child Tax Credit payments for a “looked after” disabled child in a residential setting are likely to be significantly worse off when they move onto Universal Credit. This is because they will not receive transitional protection payments to make up for the less generous treatment of their “looked after” child under Universal Credit. If this applies to you and you have received a managed migration notice, get urgent advice about requesting that your managed migration notice be cancelled.

There is also a risk that other families who are manage migrated onto Universal Credit won’t be transitionally protected. Seek urgent advice before making any Universal Credit claim if you are getting tax credits for either:

  • A young person who has either already reached the August after their 19th birthday.
  • A young person who is aged 16-19 and in a temporary interruption in their education.
  • A child who is looked after and for whom you receive a kinship carer allowance that is not for accommodation or maintenance.
What if my capital is too high?

Those on tax credits with capital of more than £16,000 will be eligible for transitional protection. However, this will be only temporary. There is a special “transitional capital disregard”. Under this rule, any capital you have above £16,000 will be ignored, but only for a maximum of 12 months. If you still have more than £16,000 in capital after 12 months, your Universal Credit award will end.

Transitional protection payments will not be uprated annually with inflation and can be reduced or even ended altogether as a result of certain changes in circumstances. This means that even those receiving transitional protection will still be worse off over time.

I’ve moved onto Universal Credit but NOT via managed migration

If you had to claim Universal Credit because you had a change of circumstances, you will not get transitional protection. Similarly, you won’t be eligible for transitional protection if you choose to claim Universal Credit. (For example, because you think you might be better off.)

There are only two exceptions to this:

1. Disabled adults already on Universal Credit who previously qualified for severe disability premium as part of their legacy benefit. These adults should receive transitional payments to compensate for the loss of the severe disability premium.

2. Families who had to move onto Universal Credit as a result of a DWP mistake and now receive a lower disabled child addition than under legacy benefits. (An example of such a mistake: DWP stopped your child’s DLA before reinstating it on appeal. The stoppage meant your Income Support claim as a carer ended). In this case, you should either get a transitional payment or let back onto legacy benefits. This is as a result of the Court of Appeal decision in R (TD & Ors) v Secretary of State for Work and Pensions. Phone our free helpline for more details if you think this applies to you.

Even if you are someone who receives transitional protection, you are still likely to be worse off over time. Transitional protection payments will not be uprated with inflation. Some changes in circumstances will also reduce the amount of transitional protection you receive.

Managed migration: frequently asked questions

What is managed migration?

There are three ways that someone might move from legacy benefits onto Universal Credit:

  • Firstly, you might have a change of circumstances that means your existing benefits stop. You’ll have little option but to claim Universal Credit instead. This can apply no matter where in the UK you live.
  • Secondly, you may volunteer to move onto Universal Credit because you think you will be better off on the new benefit rather than staying on legacy benefits. You should not do this without first seeking advice, as many families end up worse off on Universal Credit with no way of getting back onto their old benefits.
  • Lastly, the DWP can ask you to claim Universal Credit even though you have had no change in circumstances. This is called “managed migration”. Initially, managed migration only applied to small numbers of claimants in a few areas. Now, 30,000 claimants a month are receiving managed migration notices, and this figure is expected to rise to 80,000 a month by the end of 2023.

Will the DWP automatically move me onto Universal Credit?

No. Although this process is called managed migration, you won’t move over onto Universal Credit automatically. Instead, there are steps you will need to take. You will need to make a claim for Universal Credit within three months of receiving written notice that your existing legacy benefits will be ending.

Is Universal Credit replacing all benefits?

Universal Credit is not replacing any other benefits such as Carer’s Allowance, council tax support or Disability Living Allowance / Personal Independence Payment.

The only legacy benefit I get is tax credits. When will the DWP ask me to claim Universal Credit?

The government is prioritising asking tax credits-only claimants to claim Universal Credit. It hopes that managed migration will apply to tax-credits only claimants in all parts of the country by the end of 2023/24.

This means that if you claim tax credits only, the DWP can ask you to migrate onto Universal Credit if you live in an area where tax credits-only claimants must claim Universal Credit.

By the end of February 2024, manged migration notices will be getting sent to tax credit only claimants in all parts of the country.

As well as tax credits, I also get Housing Benefit. When will I need to claim Universal Credit?

From September 2023, the government plans to ask some people on legacy benefits such as Housing Benefit and Income Support to claim Universal Credit. Currently this is only happening in the three areas of Manchester, Northumberland and the London borough of Harrow. However the government hopes to have moved all claimants on other legacy benefits (with the exception of some income related ESA (irESA) claimants) onto Universal Credit during 2024/25. For example claimants whose only legacy benefits are tax credits and housing benefit will start to be sent migration notices from April 2024.

What will happen when the DWP selects me for managed migration?

You won’t move onto Universal Credit automatically. Instead, you will have to make a claim for Universal Credit.

You’ll receive a “migration notice” in writing that your legacy benefits will be ending. You’ll have three months from the date on your migration notice within which to make a claim for Universal Credit. After this, your legacy benefits will stop. The DWP can extend this three-month deadline if there are good reasons.

Your legacy benefit payments will stop on the date you claim Universal Credit, or on your deadline day if you haven’t lodged a claim for Universal Credit by then. If you haven’t claimed by your deadline day, you will have a further month within which to claim Universal Credit (although your legacy benefits will have already stopped). This is known as your final deadline.

So long as you have claimed Universal Credit either by your deadline day or your final deadline a month later, you will be eligible for transitional protection payments. If you don’t claim Universal Credit by your final deadline, you won’t get transitional protection. This is the case even if you eventually claim Universal Credit at a later date.

What happens if I would be worse off under Universal Credit?

Under Universal Credit, some people are better off, but others are worse off.

So long as you claim Universal Credit under managed migration rules and within the three-month deadline (or your final deadline one month later), you’ll be eligible for transitional protection payments. These transitional protection payments are supposed to top-up your Universal Credit if it’s less than what you were getting under legacy benefits.

If you do not claim by the deadline (or any agreed extension), you will not be eligible for transitional protection. This is so even if you claim Universal Credit at some later date.

Transitional protection for managed migration claimants will be limited for those with capital of more than £16,000. The capital they have above £16,000 will be ignored for only 12 months. If they still have more than £16,000 in capital after 12 months, their Universal Credit award will come to an end.

Certain changes of circumstances will reduce the amount of transitional protection or can even bring it to an end. In addition, transitional protection payments will not be uprated with inflation, so even those getting transitional protection payments will be worse off over time. Contact also has concerns that transitional protection will not make up reductions experienced by some families in specific circumstances such as those with a child in residential accommodation who is treated as ‘looked after’ by their local authority.

Which parts of the UK does managed migration apply to?

The information set out above applies to England, Wales and Scotland. Northern Ireland has very similar rules about managed migration onto Universal Credit but there may be some differences. Contact a local advice service in Northern Ireland for more detailed advice.