Five big changes coming to Universal Credit and benefits this year – will you be better off?
MANY big changes are coming for millions on Universal Credit and benefits this year.
It is crucial you take a note of the dates they come into effect as they could impact your eligibility or how you receive payments.
The process of moving those on old-style legacy benefits to Universal Credit, known as “managed migration”, will continue this year.
Meanwhile, those on Universal Credit will see the dates they receive certain payments change later this month.
Plus, millions will see a major change in their payments.
We reveal all the changes taking place over the coming months and all the key dates you’ll want to circle in your diary.
Benefit uprating
This month, claimants will finally begin to receive their uprated payments after benefit rates increased in April.
Universal Credit payment rates grew by 6.7% on April 8, in line with the consumer price index (CPI) level of inflation for September 2023.
However, while the new rates become immediately effective, claimants won’t start seeing their payments rise until later this month.
Those on Universal Credit must wait a bit longer to receive the uprating because of how the benefit is assessed.
It means that the date you’ll receive the pay boost will depend on when your last assessment period was.
Universal Credit is paid monthly based on your circumstances.
This is called your “assessment period” and it starts the day you make your claim.
The new Universal Credit rates will not come into effect until after the first full one-month assessment period, which starts on or after April 8.
It means that those whose assessment periods started before April 8 will sae their benefits begin to rise from May 14.
However, those whose assessment period started after this date might not see their boosted payments until June 13.
Universal Credit
HERE'S everything to know about Universal Credit:
- What is Universal Credit? Everything you need to know including how to apply
- Universal Credit calculator: How much can I claim and how do I apply?
- Universal Credit login: How do I sign in to my online account?
- How much can I earn before Universal Credit is reduced and do I get a work allowance?
- What is a Universal Credit advance payment? How to apply and pay it back
- Are Universal Credit payments going up and how much more will I get?
- How to claim Universal Credit if you’re self-employed
- How many hours can I work on Universal Credit and will my payment be reduced?
- What is a Universal Credit budgeting advance and how much could I get?
- What is the Universal Credit housing element and how much of your rent does it pay?
Payment date changes
Households on benefits including Universal Credit could see their usual payment dates change around the late May August and December bank holidays.
This is because the DWP makes payments early if your usual payment date lands on a bank holiday.
Here’s when you will be paid if you fall into this category:
- Late May bank holiday – payments due on May 27 will be made on August 24
- August bank holiday – payments due on August 26 will be made on August 23
- Festive period – payments made on December 25 and 26 will be made on December 24
If your payment date is not on any of the dates listed above, you shouldn’t expect any changes.
If yours is and you don’t receive your benefit payment one working day before the bank holiday you should contact the Department for Work and Pensions (DWP).
You can also submit a complaint to them.
Administrative Earning Threshold changes
The DWP has increased a threshold called the “Administrative Earnings Threshold” (AET).
This determines the level of support that you get from your job coach, as well as how intensively you need to look for work.
It means that hundreds of thousands more people will be tipped into the ‘intensive work search’ group.
The AET threshold was previously 15 hours, but this has been upped to 18 hours.
The change means anyone working fewer than 18 hours a week and earning less than £892 a month, or £1,437 for couples, will have fresh requirements to meet with DWP officials.
Failure to meet the stringent requirements could lead to sanctions or worst case, losing Universal Credit payments altogether.
The decision to increase the AET for a third time was announced as part of the Spring Budget 2023.
Managed migration
The DWP is in the process of moving people on so-called “legacy benefits” such as tax credits on to Universal Credit.
Those claiming housing benefit will be asked to move to Universal Credit in June.
Housing benefit is paid to households struggling to pay rent due to unemployment or a low income.
But the Government is transitioning two million claimants on legacy benefits to Universal Credit or Pension Credit by March 2025.
Managed migration started in May last year after a successful pilot in July 2019.
Households are being contacted via letters in the post which tell them how to make the move from their old benefit to Universal Credit.
Once you receive a letter, you have three months to move over, or you could lose your current benefits.
Thousands of households receiving tax credits-only have already received these notices.
Income support claimants and those con tax credits with housing benefit were sent letters from last month.
But those on housing benefit only are set to start receiving their letters in June.
Will I be better off on Universal Credit?
AROUND 1.4million people on legacy benefits will be better off after switching to Universal Credit, according to the government.
A further 300,000 would see no change in payments, while around 900,000 will be worse off under Universal Credit.
Of these, around 600,000 are expected to get top-up payments if they move under managed migration, so they don’t lose out on cash immediately.
The majority of those – around 400,000 – are claiming employment support allowance (ESA).
Around 100,000 are on tax credits while fewer than 50,000 each on other legacy benefits are expected to be affected.
Examples of those who may be entitled to less on Universal Credit according to the government include:
- Households getting ESA who and the severe disability premium and enhanced disability premium
- Households with the lower disabled child addition on legacy benefits
- Self-employed households who are subject to the Minimum Income Floor after the 12 month grace period has ended
- In-work households that worked a specific number of hours (e.g. lone parent working 16 hours claiming working tax credits
- Households receiving tax credits with savings of more than £6,000 (and up to £16,000)
But if they don’t switch in the future, they’ll risk missing out on any future increase to benefits and see payments frozen.
Those who move voluntarily and are worse off won’t get these top-up payments and could lose cash.
Those who miss the deadline and later make a claim may also not get this transitional protection either.
The clock starts ticking on the three-month countdown from the date of the first letter, and reminders are sent via post and text message.
There is a one-month grace period after this, during which any claim to Universal Credit is backdated, and transitional protection can still be awarded.
PIP consultation ends
The Prime Minister set out his “moral mission” in an overhaul of the welfare system in a major speech in April.
In the speech, he called for an end to “sick note culture” and said that the focus must shift to what work people might be able to do.
The changes proposed in the speech include a shake-up of work coach rules, a sped-up managed migration process, a tightening of the work assessment and changes to to personal independence payments (PIP).
The changes are subject to a 12-week consultation period that will end in July and will come into force if the Conservative Party win the general election.
Further details of the changes, including exactly who is affected and when the changes will be made, would be announced in the next Parliament.
Are you missing out on benefits?
YOU can use a benefits calculator to help check that you are not missing out on money you are entitled to
Charity Turn2Us’ benefits calculator works out what you could get.
Entitledto’s free calculator determines whether you qualify for various benefits, tax credit and Universal Credit.
MoneySavingExpert.com and charity StepChange both have benefits tools powered by Entitledto’s data.
You can use Policy in Practice’s calculator to determine which benefits you could receive and how much cash you’ll have left over each month after paying for housing costs.
Your exact entitlement will only be clear when you make a claim, but calculators can indicate what you might be eligible for.