By Ehsteem Arif
Published on:
Universal Credit is the UK government’s streamlined benefit system designed to replace multiple legacy benefits with a single payment. While this move simplifies the benefits system, it’s not without controversy, particularly for disabled individuals.
The transition, managed by both Her Majesty’s Revenue and Customs (HMRC) and the Department for Work and Pensions (DWP), aims to transition all legacy benefit recipients to Universal Credit by the end of 2024.
A significant change under the new rules is the reduction in annual benefits for many disabled individuals. Research indicates that they could see a decrease of approximately £2,800 per year.
This change, set to start in September 2024, accelerates the migration from the previously scheduled 2028/29 timeline. Both the DWP and the Department for Communities in Northern Ireland are pushing for this shift, with notifications to be sent by December 2025.
The DWP began issuing migration notices in 2022, informing around 500,000 legacy benefit recipients about the need to move to Universal Credit. New claims for legacy benefits are no longer accepted, necessitating a shift for current beneficiaries. There are three main reasons for this transition:
The goal is to contact all remaining tax credit benefit recipients and encourage the remaining 440,000 claimants to transition by September 2024.
To apply for Universal Credit, recipients must follow the instructions in the migration notice. Typically, the deadline is three months from the date of the notice. To make a claim, the following information is required:
After gathering this information, applicants can set up an online account on the official UK Government portal and submit their claim. It is important to note that other benefits, such as tax credits, JSA, and ESA, will cease upon claiming Universal Credit.
The Universal Credit rates for 2024/25 have been adjusted to account for a 6.7% inflation rate from June 2024. The new rates are:
| Claimant Type | Monthly Rate |
|---|---|
| Single, under 25 | £311.68 |
| Single, over 25 | £393.45 |
| Couples, both under 25 | £489.23 |
| Couples, both over 25 | £617.60 |
Additional payments are available for recipients with dependent children and for those with disabled children.
The DWP aims to transition recipients of the following legacy benefits to Universal Credit by the end of 2024:
Universal Credit supports millions of families with living expenses, typically paid monthly, although some recipients may receive payments twice a month.
In summary, the transition to Universal Credit aims to streamline the benefits system but brings significant changes, particularly for disabled individuals who might see a substantial reduction in their annual benefits. Preparing for this transition is crucial for all affected recipients to ensure a smooth shift and continuous support.
By the end of 2024.
Approximately £2,800 per year.
Email, housing details, payslips, childcare costs, bank details, savings, and investments.
£393.45.
No, new claims for legacy benefits are no longer accepted.
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A tax law expert with a knack for breaking down complex regulations into digestible insights. Ehsteem's articles on the tax news blog offer invaluable guidance to readers navigating changes in tax legislation.
