DWP benefit warning to thousands ahead of Universal Credit shake-up

The Department for Work and Pensions (DWP) has been warned that any failure in moving people over to Universal Credit could cause "real-world misery for thousands".

The warning came from a report by the Public Accounts Committee (PAC) which looked into the benefits department's managed migration plan. The DWP is currently working to move Brits claiming "legacy benefits" onto the newer Universal Credit and the process is called "Managed Migration".

In its report, the PAC said that even though it would be a "challenge" the DWP must ensure it helps all claimants - particularly those who were classed as “vulnerable” - to switch over smoothly so they do not lose their benefit entitlement. Under the DWP's plan, once you receive your migration notice in the post, you need to put in a claim for Universal Credit within three months. If you don't your benefits will be stopped.

The DWP has insisted benefits are only ever stopped as a last resort after multiple unsuccessful attempts to engage with someone. The PAC report noted that DWP expected that around 4% of the claimants currently on legacy benefits would not switch to Universal Credit.

Claimants affected by the plan are those claiming Working Tax Credit, Child Tax Credit, Housing Benefit, Income Support, income-based Jobseeker’s Allowance, and income-related Employment and Support Allowance. As of March last year, there were around 2.2 million households receiving legacy benefits, and DWP has been working to move 900,000 of these to Universal Credit. The DWP has stepped up its efforts this year and expects to have notified all households by 2025.

The PAC said it was concerned about the potentially large numbers of legacy benefit claimants who could fall through the cracks in support and end up losing their benefits entirely if they failed to put in a claim. The report said: “Although the department expects only around 4% of these claimants will not switch to Universal Credit, we would be very concerned if large numbers of these people did not transfer and were to lose their benefits. It is vital that the department helps these claimants to make the switch, including offering face-to-face support and making sure people fully understand the process, including the arrangements for transitional protection.”

A National Audit Office (NAO) report in February warned that 21% of households claiming legacy benefits had not transferred to Universal Credit after receiving a notice to switch, and therefore had their benefits stopped. Almost all of these households had been receiving Tax Credits. Chairwoman Dame Meg Hillier said the PAC had "scrutinised Universal Credit since its inception" noting that it was a "massive" change to how benefits are delivered and would "impact millions of people".

She said: "This means if the transition from legacy benefits to Universal Credit fails even an small proportion of people, it will lead to real-world misery for thousands. The DWP must make sure that people are not cast into financial hardship due to a bureaucratic change, and that robust support is in place for those vulnerable claimants who need it most. The DWP argues that an increase in fraud across society is a reason for high rates of fraud and error related to universal credit, rather than laying out a plan for how it is tackling the problem.”

A DWP spokesperson said: "There is a range of support to help people move, including dedicated helplines, extensions and transitional protection for those who need it. Universal Credit is having a sustained positive impact on the jobs market, with people on Universal Credit more likely to be in work within three, six and nine months of their claim."