Recent adverts on national television have started to encourage those not claiming Universal Credit (UC), but who might be entitled to do so, to consider making an application. The implication is that UC claimants will (“may”) be better off.
Though these adverts are not specially identified as being aimed at those who are currently in receipt of ‘legacy benefits’ – such as Job Seekers Allowance, Employment Support Allowance, and Tax Credits – they neatly coincide with a Government announcement that the ‘managed’ (compulsory) conversion of legacy benefit claims to Universal Credit claims – suspended in recent years over issues with UC – has restarted.
Since these adverts have become widely seen we at Citizens Advice, as well as others, have become aware that numerous organisations – both statutory and voluntary – have offered mixed messages on the value of the ‘voluntary migration’ of legacy claimants to UC.
There has appeared to be an approach adopted that, if compulsory migration is on its way, legacy claimants might as well migrate to UC early and, almost literally, avoid the rush.
The real picture for benefit recipients on the ground is much more complex and whether voluntary conversion to UC leaves the claimant better or worse off will often depend on that claimant’s individual circumstances.
Below is an attempt to simplify the choices which face those currently in receipt of legacy benefits who are considering converting to Universal Credit voluntarily.
It is important, in the first instance, to clarify what we mean by benefit ‘migration’ in relation to UC. ‘Managed migration’ is when, like it or not, those currently claiming legacy benefits will be required to convert to UC. This will happen in Coventry over the next 2 years though it is impossible to know yet exactly when official notification letters will drop through claimant post boxes. Claimants will be given time to make their UC claim but once that time expires, if no UC claim has been made, the entitlement to the existing legacy benefit will end.
‘Natural migration’ to UC, for those on legacy benefits, is something different and has been in operation for some years. Where someone in receipt of legacy benefits is subject to a substantial change in their circumstances, rather than their legacy claim being corrected to absorb the new circumstances, the claimant is expected to close their existing claim and make a new application for UC.
Where ‘managed migration’ and ‘natural migration’ have not occurred, and a claimant of legacy benefits chooses without compulsion to convert to UC this is called ‘voluntary migration’.
Most people are now aware of what Universal Credit is; one means-tested benefit which supersedes six legacy benefits (such as JSA, ESA, and Tax Credits). However, unless they already claim UC they may not be aware that UC is not the same as these benefits in the rates paid, the application process followed, conditionalities applied, how frequently benefit payments (including housing payments) are made, or deductions rules applied.
When making a decision to voluntarily convert to UC five issues need to be considered:
- Will I be entitled to UC?
- Will I be better off in terms of the rates of benefit paid to me?
- Will I be required to do more in order to ‘earn’ my benefit payment?
- How will UC affect to my current ability to repay benefit and other deductions, and
- How will I cope with different payment and benefit adjustment practices, especially around housing payments?
UC entitlement for those on legacy benefits is not automatic. For example, those in receipt of Tax Credits are not subject to a savings limit but those in receipt of UC are. Savings you have accumulated while claiming Tax Credits could make you ineligible for UC.
Those currently in receipt of Severe Disability Premium (SDP), to augment their current benefit payment, will be protected from being worse of under UC under ‘managed migration’ because of something called ‘transitional protections’. These transitional protections will not apply to those migrating voluntarily.
Conditionality rules, what you are required to do in terms of jobseeking, are stricter under UC than legacy benefits. For example, those in receipt of Tax Credits but not working full time are not required to jobseek whereas, under UC, all part-time workers are required to seek full-time working hours. Being a part-time worker and not accepting more hours under UC can become an offence resulting in a sanction.
Finally, repayment regimes for benefit overpayments under UC are harsher than under legacy benefits. Even if claiming UC will result in a higher overall payment it might be that converting will trap you into a much harsher benefit repayment environment where debts you were repaying at affordable levels are now expected to be repaid immediately.
UC payments for daily living expenses are paid monthly in arrears, with very few exceptions. Housing payments, what would have been called Housing Benefits, are notoriously slow in being delivered – at least in the first instance – and are also paid monthly in arrears. The result is that, in most cases, households struggle to budget and are frequently subject to automatically triggered housing arrears notices from landlords who require rent paid in advance.
Though the scenarios above are not exhaustive, it is important to know one vital extra fact: once an application for UC has been submitted any pre-existing legacy claim is automatically closed. New UC claim payments, by design, will not be paid for a minimum of 5 weeks (and often much longer); though, in certain circumstances, previous payments can ‘run on’ for up to 2 weeks to reduce that waiting period.
In other words, once you make that decision to convert there is no going back. It is important to get that decision right and be prepared for a long wait for a first correct UC payment.
From our perspective it is imperative for anyone considering a voluntary migration from legacy benefits to UC to not only get independent expert advice before making that decision but to also prepare for the built-in challenges making a new digital-by-default UC claim entails.
There is expert help to make new UC applications – via the ‘Help-to-Claim’ project – but advice needs to be sought before any final decision to convert is made.
The Help-to-Claim project can be contacted on 0800 144 8 444. More information about this project and how to claim Universal Credit can be found at: https://www.citizensadvice.org.uk/about-us/contact-us/contact-us/help-to-claim/ .
Alternatively, for the government’s guidance to “completing the move to Universal Credit” visit:
Please don’t be persuaded to claim UC without first obtaining expert independent advice.
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