DWP Will Stop Paying Six Benefits in April and Replace Them With Universal Credit

The Department for Work and Pensions (DWP) is set to complete a major overhaul of the UK’s benefits system, replacing six older legacy benefits with Universal Credit.

This ambitious transition aims to simplify welfare payments, improve support for individuals and families, and incentivize employment. While the reform promises long-term benefits, it brings significant changes for millions of claimants.

With the final phase already underway, here’s a detailed look at what this means for those currently receiving legacy benefits, the timeline for the changes, and how to navigate the migration process.

What Benefits Are Being Replaced?

The DWP is phasing out the following six legacy benefits:

1. Housing Benefit – A benefit designed to help with housing costs for low-income individuals and families.
2. Income-related Employment and Support Allowance (ESA) – Financial support for those unable to work due to illness or disability.
3. Income-based Jobseeker’s Allowance (JSA) – A benefit for individuals actively looking for work.
4. Child Tax Credit – Support for families with children to help cover living costs.
5. Working Tax Credit – Additional financial support for those on low incomes.
6. Income Support – A benefit for individuals with no income or a very low income who are not required to seek work (e.g., carers or single parents with young children).

These benefits are being replaced by Universal Credit, a single, streamlined payment that consolidates these supports into one system.

Why the Move to Universal Credit?

The Universal Credit system was introduced to modernize the welfare system. Its primary goals include:

• Simplification: Replacing multiple overlapping benefits with a single monthly payment to reduce administrative burdens and claimant confusion.
• Flexibility: Adjusting support levels in real-time based on earnings, ensuring claimants receive the right amount of support as their circumstances change.
• Incentives to Work: Universal Credit removes some of the disincentives to work that were embedded in the legacy benefits system, making it easier for people to take up employment or increase their working hours.

How Will the Transition Work?

The transition process involves a phased migration to Universal Credit, with a target to move all claimants by March 2026. Here’s how it will work:

Migration Notices

• Claimants currently receiving legacy benefits will receive a migration notice in the post, informing them that it’s time to move to Universal Credit.
• The notice includes a three-month deadline to apply for Universal Credit.
• Failure to act by the deadline will result in the termination of existing benefits.

Tax Credit Deadline

• Claimants of Working Tax Credit and Child Tax Credit are among the first to be impacted.
• These benefits will officially end on April 5, 2025. After this date, no further payments will be made.

What Happens If You Miss the Deadline?

• If you do not apply for Universal Credit by the specified date, your current benefits will stop, leaving you without financial support.

What Support Is Available?

• The DWP has pledged to provide transitional protection to ensure claimants are not worse off during the switch.
• This means claimants who would receive less under Universal Credit compared to their legacy benefits will receive an extra amount to cover the shortfall, though this additional payment will gradually decrease over time.

Impact on Claimants

The move to Universal Credit is one of the most significant welfare reforms in decades, and it will affect millions of households. According to the DWP:

• 594,000 families claiming tax credits as of April 2024 will lose their benefits if they fail to apply for Universal Credit by April 2025.
• Many claimants have already received letters from the DWP advising them to take action. These letters provide guidance on how to apply for Universal Credit.

What Should Claimants Do?

If you receive a migration notice, follow these steps to ensure a smooth transition:

1. Act Quickly: Apply for Universal Credit as soon as you receive your notice. Delaying action could result in benefit disruptions.
2. Seek Guidance: If you’re unsure about the application process or how your payments will change, consult the DWP website or organizations like Citizens Advice.
3. Understand Transitional Protection: If your Universal Credit entitlement is less than your current benefits, you may be eligible for transitional protection to cover the difference temporarily.

Citizens Advice emphasizes: “If you claim Universal Credit before the deadline, the DWP might pay you extra to stop you being worse off. This is called ‘transitional protection.’”

A Message from the DWP

Sir Stephen Timms, Minister for Social Security and Disability, has reassured claimants about the process. He stated:

“This funding boost will support many people as they make the move from old benefits to Universal Credit – ensuring customers feel confident and informed throughout the application process.

I want to encourage anyone receiving a migration notice over the coming months to act without delay to secure quick access to benefit entitlement.”

The DWP has also committed to providing enhanced support through jobcentres, local work programs, and health and skills initiatives.

Key Dates to Remember

• April 5, 2025: Final tax credit payments will be made. No further payments will be issued after this date.
• March 2026: Complete migration to Universal Credit is expected.

Final Thoughts

The shift from legacy benefits to Universal Credit represents a transformative change for the welfare system.

While the transition may seem daunting, it’s essential for claimants to stay informed and take timely action. Ignoring a migration notice can lead to financial disruption, but proactive steps can ensure uninterrupted support.

For additional information and support, visit the DWP website, contact your local jobcentre, or consult Citizens Advice. This is your opportunity to secure your financial future under the new Universal Credit system.

For more detailed information, guidance, and updates on Universal Credit, visit Universal Credit News. It’s your go-to resource for staying informed and navigating these changes with confidence.

FAQ

Which benefits are being replaced by Universal Credit?

The six benefits being replaced are Housing Benefit, Income-related Employment and Support Allowance (ESA), Income-based Jobseeker’s Allowance (JSA), Child Tax Credit, Working Tax Credit, and Income Support.

What happens if I don’t apply for Universal Credit by the deadline?

If you don’t apply by the three-month deadline in your migration notice, your existing benefits will stop, leaving you without financial support.

What is transitional protection, and how does it work?

Transitional protection is extra financial support provided if your Universal Credit payment is lower than your legacy benefits. It covers the shortfall temporarily but decreases over time.

When will tax credits officially end?

Tax credits will end on April 5, 2025, with no further payments made after this date. You’ll need to apply for Universal Credit before this deadline.

What should I do when I receive a migration notice?

You should act quickly by applying for Universal Credit before the three-month deadline in the notice to ensure your benefits continue without interruption.