Thousands of Universal Credit recipients could be in line for additional funds on a temporary basis to prevent a sudden drop in income this autumn. The extra amounts even surpass what they would usually receive in their monthly payments – and it’s all part of the ongoing overhaul of the benefits system.
Currently, just under seven million people are on Universal Credit. This figure is rising as claimants are switched from older forms of welfare support.
These legacy benefits include tax credits, Income Support, Housing Benefit, income-based Jobseeker’s Allowance and income-related Employment and Support Allowance. As part of the ‘managed migration’ this autumn, thousands more individuals are being ‘transitioned’.
Households are receiving letters and given a three-month window to apply for Universal Credit before their existing benefits cease. Now the Department for Work and Pensions (DWP) has issued an update outlining the rules for increasing people’s Universal Credit during this transition.
It states that an extra amount, known as a transitional element, can be paid under certain conditions and has clarified how this operates. The DWP explains that the transitional element can be added if someone has received a Migration Notice letter and has moved to Universal Credit by the specified deadline date, reports the Mirror.
This element essentially serves as a bridge between what individuals were previously receiving in benefits and what they are due to receive under Universal Credit, according to Birmingham Live. DWP statistics indicate that by late 2025, when Universal Credit is fully implemented, approximately 2.2 million households are expected to receive transitional protections to prevent their benefits from falling below previous levels.
In addition, around 1.2 million families are projected to retain their current benefit amounts, while 3.8 million could see an increase in payments under Universal Credit. The DWP guidance explains: “When a claim is made and verified, the transitional element is calculated using a Universal Credit amount that’s based on your known circumstances from the day before your claim. This amount is referred to as the indicative Universal Credit award.”
It added: “At this point, the transitional element is the difference between the indicative Universal Credit award and your previous legacy benefit amount. It aims to protect your benefit entitlement at the point of moving to Universal Credit.”
This transitional element depends on information provided by claimants in their Universal Credit applications, including factors such as employment status, family structure, income, savings and investments, children and childcare costs, potential disabilities or care responsibilities, and specifics of any benefits already being received.
Officials have outlined that the method for assessing eligibility for Universal Credit is thorough, involving verification against data from the Department for Work and Pensions (DWP), HM Revenue and Customs (HMRC), and local councils. This is particularly pertinent in cases such as Housing Benefit.
Once any benefit cap deductions are taken into account, DWP may introduce a transitional element to lessen any drop in benefits, ensuring alignment of Universal Credit with previous benefits amounts.
This system of transitional protection is designed to guard against any loss of income for individuals shifting over to Universal Credit, keeping their income consistent with what they used to receive. Notably, this system remains unchanged by the April increase in Universal Credit, which can lead to a reduction in the transitional amount.
The DWP has stressed: “If your circumstances change after you’ve made your claim, any transitional protection you receive may stop.”