Our 5 concerns about migrating people to Universal Credit
The process to finally replace legacy benefits with Universal Credit is speeding up, but too many problems remain unresolved
Managed migration is the process where claimants are being compulsorily transferred from legacy benefits to Universal Credit. More than a decade after Universal Credit’s initial rollout, the process is picking up pace, with hundreds of thousands of people due to receive a ‘migration notice’ at some point in 2024 telling them they must now make a Universal Credit claim.
This wasn’t the only option on the table. The government could have opted to rely wholly on natural or voluntary migration, increasing the Universal Credit caseload through new claims and/or requiring migration when the circumstances of legacy benefit claimants changed. Alternatively, legacy benefit systems could have been gradually aligned with Universal Credit so that people were treated as Universal Credit claimants even if technically still claiming other benefits, minimising disruption and anxiety for claimants.
If deciding that migrating people over was the only option, the government could have automated the transfer process, rather than requiring people to make a new claim. Managed migration in practice places most of the responsibility for implementing Universal Credit on individual claimants rather than the Department for Work and Pensions (DWP).
So it’s right that there’s a very high bar for judging the success of the policy. In 2023, Citizens Advice helped around 7,500 people with issues related to managed migration. This was before the rollout scaled up; we expect numbers to rise as the process captures people with more complex benefit claims. Here’s our 5 biggest concerns about the policy.
1. Fewer people than expected are claiming Universal Credit
We’re concerned about the high proportion of people who don’t claim Universal Credit after receiving a migration notice, as reported in DWP statistics. The monthly non-claim rate has been around 25% each month since the onset of managed migration. A Freedom of Information request by Z2K revealed that, on average, people who fail to make a claim are missing out on £344 per month in benefit income.
This proportion may come down as managed migration speeds up. However, there are no grounds for complacency about this. It was disappointing therefore to see that the government has revised down its forecasted spending for Universal Credit as a result of the higher-than-expected non-claim rate. It expects to save around £1 billion per year. Rather than banking the savings every effort should be made to understand why people aren’t claiming, and to ensure people are getting the support they’re entitled to.
2. Claimants with vulnerabilities may need more support
A more worrying explanation for the high non-claim rate after people receive a migration notice is that many claimants have higher levels of practical and emotional support needs — but the managed migration process isn’t meeting these needs. Citizens Advice delivers the Help to Claim (HTC) service on behalf of the government which means we see first hand the support people can need in making a claim. Research undertaken by HTC to ensure that the service meets the needs of clients we’re likely to see was summarised in our submission to the Public Accounts Committee (PAC) inquiry on the implementation of Universal Credit.
Many undergoing managed migration are long-term benefit recipients, unfamiliar with Universal Credit. Many have complex needs and circumstances, and may lack digital access and capability. We recently helped Martha*, for example, to secure an extension to her migration notice deadline — after she was initially refused by the DWP. Martha receives Personal Independence Payment (PIP) as well as tax credits; she’s extremely vulnerable and has difficulties communicating.
People with English as an additional language also face barriers to accessing support from the DWP and jobcentres. Our position is that independent advice on a face-to-face basis should be made available to all claimants: HTC is currently only funded to provide advice by phone and online. Research by the Child Poverty Action Group has also revealed that people eligible for migration deferrals, such as terminally ill claimants, are not benefiting from this safeguard, either due to limited awareness or poor administration by the DWP.
Non-claim rates rise considerably by age. 20% of people in their 30s and 22% of people in their 40s have had their legacy benefits closed after failing to claim Universal Credit when required, but this rises to 27% of people in their 50s, and 32% of people aged 60 or over. The Income Support and Jobseeker’s Allowance claimants who will migrate to Universal Credit this year, for instance, tend to be older than the tax credit claimants who have transferred so far (and some Pension Credit claimants with younger partners will also be expected to migrate).
We also learned after the Prime Minister’s speech on disability benefits last week that all income-related Employment and Support Allowance (irESA) claimants will be transferred to Universal Credit at least 3 years sooner than expected. There is evidence that many irESA claimants would be better off on Universal Credit, and so the government had originally delayed migration to 2028 in order to save around £1 billion each year.
We have argued previously that irESA claimants should have the option of transferring sooner than 2028 if independent advisers can verify they would be better off. However, it must be recognised that this is a potentially highly vulnerable group of claimants. Before the timetable for migrating this group is brought forward again, it’s essential that better safeguards are in place, and that the government develops a full understanding of why some people fail to claim Universal Credit when expected to do so.
3. Some people are missing out on transitional protection
The government needs to be careful that it isn’t encouraging legacy benefit claimants to apply for Universal Credit before they receive a migration notice. Our advisers have reported cases where claimants have made a Universal Credit claim prematurely, having mistaken an information leaflet about managed migration for an official migration notice.
Claiming too early means that people won’t be entitled to the transitional element of Universal Credit. The transitional element is designed to ensure that claimants initially receive Universal Credit payments equivalent to their legacy benefit award so they don’t experience a loss of income straight away. Sarah*, for example, who lives with her partner and 3 children, applied for Universal Credit in a panic after receiving a DWP information leaflet. She only contacted Citizens Advice after learning that her Universal Credit entitlement was less than £1 per month; had she claimed as a managed rather than voluntary migrant, she would likely have received a transitional element of around £70 per month.
4. The 5-week wait means many new Universal Credit claimants will start off in debt
The majority of new Universal Credit claimants take out advance loans from the DWP to bridge the income gap caused by the 5-week wait for a first Universal Credit payment. Despite simply moving from one benefits system to another, migrants will still be subject to this delay, meaning many will need to take out a benefit transfer loan (equivalent to a new claim loan), unavoidably starting life on Universal Credit in debt.
Some required to migrate will have a 2-week ‘run-on’ period after their legacy benefit claim ends, but this still leaves a 3-week gap to overcome. Run-on payments aren’t available for tax credit claimants.
Advance loans are repaid through deductions from Universal Credit payments, meaning many new claimants will receive less than required to meet their basic needs, and/or not benefit in full from the transitional element.
5. Managed migration will create overpayment debts for many people
The recovery of benefit overpayments is another major source of deductions from Universal Credit awards. Our advisers report that many overpayment debts are being identified by the government as claimants switch from legacy benefits to Universal Credit. In some cases debts can relate to payments from a decade ago or longer.
Some overpayment debts are being created by managed migration. For example, in order to facilitate a switch from weekly to monthly benefit payments, the government calculates the annual earnings for legacy benefit claimants who are in work. But if someone is paid by their employer just before the day of the month that has been allocated as their ‘migration day’, this will lead the government to overestimate how much they earn when working out the annualised figure. The government then assumes they’ve been overpaid legacy benefits like tax credits. These overpayments will be taken from future Universal Credit payments.
How the transitional element is being worked out is also a potential source of overpayment debts. There’s been a degree of uncertainty around this so far. For example, in general the transitional element is supposed to be based only on information from a claimant’s legacy benefit record. But in some cases new information provided via a new claim for Universal Credit can be used to supplement this information. It hasn’t always been clear how and when this should happen, meaning the transitional element may have been overestimated for some people.
The government’s position is that all overpayments will be recovered, again meaning that people transferring to Universal Credit will be paid less than they were expecting, and possibly less than they need, through no fault of their own.
We want Universal Credit to succeed. To make this more likely, the government needs to get its implementation right. As the rollout speeds up, there isn’t much time left to address the problems with the managed migration process. The government should take action urgently.
*Names have been changed.
