Martin Lewis issues urgent ‘do not ignore’ warning to thousands on benefits – if you skip it your payments could stop
MARTIN Lewis has urged thousands on benefits not to ignore an upcoming change or risk losing their payments.
Brits who receive three major “legacy benefits” need to look out for a letter from the Department for Work and Pensions.
Speaking on his BBC podcast, Martin explained how claimants can manage the transition to a new payment structure.
As part of the overhaul of the benefits system in 2012, the Government legislated to combine six different benefits into one combined, means-tested payment – Universal Credit.
The new model was trialled in 2019 and officially put into action in November 2022.
However, ministers were keen to avoid a “cliff edge” for those making the swap, so arranged for the transition to be tapered over a couple of years.
This has been dubbed “managed migration“, with people who claimed the six benefits allowed to keep them as a “legacy” for a short time.
Am I entitled to Universal Credit?
According to the GOV website, if you’re on a low income or need help with your living costs, then you could be entitled to Universal Credit.
To claim, you must live in the UK, be aged 18 or over (with some exceptions if you’re 15 to 17), be under State Pension age, and have £16,000 or less in money, savings and investments.
Other circumstances are if you are out of work, or unable to work, for example because of a health condition.
Now, though, legacy recipients of tax credits, housing benefit or Employment Support Allowance (ESA) are being moved over to Universal Credit.
Martin urged those affected to watch out for a vital letter from the DWP, which will outline what they have to do to receive it.
He said: “On tax credits, housing benefit, ESA or similar?
“Don’t ignore the crucial letter – you could lose your benefits.
“The Department for Work and Pensions is sending letters to many people saying you must now apply to switch to Universal Credit.
“Don’t ignore it – tragically, DWP stats show a third have had benefits cut off after not applying.”
This is due to the fact that, when you change to Universal Credit, you have to complete a new application to ensure you are still eligible to receive it.
Official figures show that the DWP has sent out more than 1.14 million migration notices in the past two years.
But if you neglect to submit your application after receiving one, you could see your benefits cut off.
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.
It is estimated that around 284,000 people have lost out on payments by failing to act in the same period.
And The Sun exclusively revealed that almost 200,000 households receiving tax credits alone have seen them stopped for the same reason.
On the other hand, more than 623,000 people have applied successfully, while 232,000 are still in the process of migrating.
HELP CLAIMING UNIVERSAL CREDIT
As well as benefit calculators, anyone moving from tax credits to Universal Credit can find help in a number of ways.
You can visit your local Jobcentre by searching at find-your-nearest-jobcentre.dwp.gov.uk/.
There’s also a free service called Help to Claim from Citizen’s Advice:
- England: 0800 144 8 444
- Scotland: 0800 023 2581
- Wales: 08000 241 220
You can also get help online from advisers at citizensadvice.org.uk/about-us/contact-us/contact-us/help-to-claim/.