The Division for Work and Pensions (DWP) not too long ago introduced plans to restart the ‘managed migration’ strategy of shifting legacy profit claimants over to Common Credit score from subsequent month.
As much as 2.6million individuals on older type advantages together with 1.2million at the moment claiming Earnings-Associated Employment and Assist Allowance (ESA) and a million on Working Tax Credit and Youngster Tax Credit, 100,000 on Earnings-Primarily based Jobseeker’s Allowance (JSA) and Housing Profit, plus 200,000 on Earnings Assist.
The DWP additionally not too long ago introduced that solely 500 individuals will initially be moved to Common Credit score by the managed migration course of, however it will enhance over the approaching months as a way to full the transfer for all claimants by the top of 2024.
Legacy profit claimants will obtain a ‘migration discover’ giving them three months discover of when the ‘managed migration’ course of will start.
Nevertheless, there are 3 ways individuals will migrate to UNiversal Credit score, outlined within the DWP’s ‘2022-24 technique for implementing the ultimate section of Common Credit score’ - which you'll be able to learn in full right here.
These are:
- Pure migration - a change of circumstances triggers a transfer
- Voluntary migration - claimants chooses to maneuver
- Managed migration - DWP triggered
The DWP estimates that 1.4m individuals on legacy advantages could also be higher off once they transfer to Common Credit score - some 54 per cent.
Nevertheless, by those self same estimations the DWP figures counsel that 900,000 individuals (35%) can be worse off and 300,000 will see no change (11.5%).
Migration course of choices
Pure migration
Pure migration has been in place because the introduction of Common Credit score and occurs when a change of circumstances akin to a change in employment standing or household scenario occurs so they should make a brand new declare for a profit that Common Credit score has changed and they're going to ‘naturally’ migrate to Common Credit score.
The DWP additionally defined: “Covid-related easements that had been in place for working tax credit score recipients have now been eliminated and we count on pure migration to proceed at a gentle price going ahead.”
The DWP mentioned claimants ought to contemplate the next earlier than selecting to maneuver to Common Credit score:
- Examine that you're eligible to say Common Credit score
- Examine your financial savings - anybody with over £16,000 in financial savings or capital isn't eligible for Common Credit score and mustn't apply. In case you or your associate have over £6,000 in financial savings or capital, your Common Credit score funds can be decrease
- Examine how Common Credit score recovers any excellent money owed you could have
- Use one of many impartial profit calculators to see in case your entitlement to Common Credit score may very well be increased than the cash the UK Authorities pays you now
Voluntary migration
Claimants can select to voluntarily transfer throughout to Common Credit score, nevertheless, the complexity of the legacy advantages system means it may be troublesome for individuals to see and evaluate their total entitlements.
The DWP is encouraging everybody to make use of an impartial advantages calculator to work out if they'd be on the next or decrease fee once they transfer to Common Credit score to assist them make the most effective migration choice.
DWP mentioned: “We wish to assist claimants make an knowledgeable selection themselves about whether or not to maneuver voluntarily.
“This strategy is about ensuring that those that stand to see the next entitlement have the chance to maneuver sooner somewhat than later, whereas concurrently ensuring those that might have a decrease Common Credit score award anticipate managed migration when they might be eligible for transitional safety so they preserve the identical entitlement on the level they transfer.”
Individuals who select to maneuver voluntarily usually are not entitled to transitional safety which is why it's important that claimants are certain they're making the best selection.
As soon as an utility is made to maneuver to Common Credit score, there is no such thing as a reverting to earlier advantages.
For these claimants who don't select to maneuver and haven't migrated naturally following a change of circumstance, we might want to handle their migration to UC.
Managed migration
For these claimants who don't select emigrate voluntarily nor have migrated naturally, the DWP might want to handle their migration to Common Credit score.
DWP explains: “Underpinning managed migration is our dedication to transitional monetary safety to make sure that eligible households we transfer to Common Credit score shouldn't have a decrease award on UC on the level we transfer them if their UC entitlement is decrease than their entitlement on legacy advantages.
“We recognise that claimants’ confidence, expertise and belief within the profit system will fluctuate. That's the reason the managed migration monitor may even be underpinned by a customer-focused strategy with efficient processes and techniques to maneuver individuals throughout safely.”
DWP has a number of key duties to deal with to start out managed migration:
- gathering information on the completely different circumstances of legacy advantages’ claimants
- designing the processes and instruments to calculate each UC entitlement and transitional safety (the place relevant), then paying the proper award
- assessing and offering the completely different ranges of help required to make a profitable declare
- contemplating how greatest to inform claimants about their transfer
- understanding the completely different challenges claimants might face after making their declare to UC and the help they want
Transitional Safety
Parliament legislated to introduce Common Credit score and for the top of legacy advantages, together with Tax Credit. When passing this laws, Parliament additionally dedicated to offering transitional monetary safety for many who are moved onto Common Credit score by the managed migration course of.
Transitional safety doesn't apply to those that naturally or voluntarily migrate.
This implies these eligible households with a decrease calculated award in Common Credit score than their legacy advantages awards will see no distinction of their entitlement on the level they're moved to Common Credit score, offered there is no such thing as a change of their circumstances in the course of the migration course of.
Nevertheless, the DWP warned that the transitional safety aspect will “erode over time” with will increase in Common Credit score components - excluding the childcare prices aspect - and can cease with sure adjustments of circumstances.
The UK Authorities has additionally offered further safety for many who had a change in circumstance and have been receiving Extreme Incapacity Premium.
As well as, all new claimants and people migrating fromTax Credit who're gainfully self-employed can be eligible for a 12-month start-up grace interval earlier than the Minimal Earnings Ground applies, to assist them develop their enterprise.
Will I've the next or decrease Common Credit score entitlement than I obtain now?
Sorts of claimant which may see the next entitlement beneath Common Credit score embrace:
- ESA Assist Group who usually are not in receipt of the Extreme Incapacity Premium
- In-work households receiving Housing Profit solely or Working Tax Credit score and Housing Profit (more likely to have increased entitlements beneath Common Credit score because the earnings taper guidelines are extra beneficiant)
- Individuals who don't work sufficient hours to obtain Working Tax Credit score
- Households who usually are not at the moment claiming all of the legacy advantages they're entitled to
Sorts of claimant which may see a decrease entitlement beneath Common Credit score (and due to this fact more likely to be eligible for transitional safety if they're moved by the managed migration course of) embrace:
- Households in receipt of ESA who're in receipt of the Extreme Incapacity Premium and Enhanced Incapacity Premium
- Households with the decrease disabled baby addition on legacy advantages
- Self-employed households who're topic to the Minimal Earnings Ground, after the 12 month grace interval has ended
- In-work households that labored a selected variety of hours (for instance, lone dad or mum working 16 hours claiming Working Tax Credit)
- Households receiving Tax Credit with financial savings of greater than £6,000 (and as much as £16,000) - Common Credit score entitlement is decreased in a unique calculation to Tax Credit. households with financial savings of greater than £16,000 usually are not usually eligible for Common Credit score
Earlier than making any choice about shifting to Common Credit score, the DWP advises trying on the ‘Understanding Common Credit score’ webpage on GOV.UK right here.
To maintain updated with the most recent advantages information, be a part of our Cash Saving Scotland Fb group right here, observe Report Cash on Twitter right here, or subscribe to our twice weekly publication right here.