Exactly how next week’s Universal Credit changes will affect you

Major changes to Universal Credit that will affect millions of people are set to take effect this week. The UK government has announced it will start transferring people from six old-fashioned ‘legacy’ benefits to Universal Credit from Monday May 9 after suspending the process due to the coronavirus pandemic.

The changes will mean that around 2.6 million people on income-based Jobseeker’s Allowance, Earnings-Related Employment and Allowance, Income Support, housing allowance, a child tax credit and an in-work tax credit will gradually begin to transition to universal credit. The government aims to phase out these benefits by 2024.

While many claimants will receive transition payments during this time, others will be left out. Here’s exactly how the upcoming Universal Credit changes will impact you. Read more:Hundreds of thousands of people will not receive transitional benefits

How will I be impacted?

The Department for Work and Pensions (DWP) will move people into “managed migration” segments starting with a group of 500 people. Although the DWP eventually contacts everyone, if you are on benefits, you have the option of choosing to move right away. This is helpful for those who will end up better off thanks to Universal Credit – which the government estimates will affect 1.4 million people (55% of the population on welfare).

The government has set out a plan for people who will not automatically be better off under Universal Credit – around 900,000 people – but it only applies to those displaced by the DWP. These people will receive transitional payments to make up the difference. But around 300,000 will lose their payments altogether due to changed circumstances or leave the benefit system. For all the latest benefits, money saving and finance news and advice straight to your inbox, sign up for our twice weekly WalesOnline Money newsletter here.

According to the government’s assessment, you will be entitled to more money if the following benefit situation applies to you:

  • Support group for the Employment and Support Allowance (AES) not receiving the severe disability premium
  • Working households receiving only housing benefit or employment tax credit and housing benefit
  • People who do not work enough hours to benefit from the work tax credit
  • Households that are not currently claiming all of the inherited benefits to which they are entitled.

You may end up receiving less money if the following benefit situation applies to you:

  • Households benefiting from the AES who benefit from the severe disability premium and the increased disability premium
  • Households whose addition for disabled children is the lowest on benefits inherited from the past
  • Self-employed households subject to the minimum income after the end of the 12-month grace period
  • Working households that have worked a certain number of hours (e.g. single parent working 16 hours and claiming work tax credits)
  • Households receiving tax credits with savings of over £6,000 (and up to £16,000).

You can use an independent benefit calculator to compare your government payments under the two plans.

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