Universal Credit has now replaced most older benefits, including Tax Credits, Income Support, income-based Jobseeker’s Allowance and Housing Benefit
The Department for Work and Pensions (DWP) is this month sending out the final letters to benefit claimants that will be moved to Universal Credit.
Universal Credit has now replaced most older benefits for millions of UK households, including Tax Credits, Income Support, income-based Jobseeker’s Allowance and Housing Benefit.
There are still some people claiming income-related Employment and Support Allowance (ESA) that will be moved across, with all remaining claimants set to be contacted by the end of September 2025.
The DWP wants the “managed migration” process of moving everyone to Universal Credit to be complete by March 2026. If you have yet to be moved over, you will receive a “migration notice” in the post.
This will give you a three-month deadline to move across to Universal Credit – after this point, your existing benefits will be stopped.
The DWP claims 55% of people will be better off on Universal Credit, and 35% would be worse off. The rest will see no change. If you’ll be worse off on Universal Credit, you will receive monthly transition payments which make up any shortfall.
The transitional protection lasts until there is no difference between your new Universal Credit award and what you received before under legacy benefits.
However, you will only receive these transitional payments if you wait to be moved across through the “managed migration” process.
It is important to note that you will have to wait five weeks for your first Universal Credit payment, although some legacy benefits including income-related ESA will “run on” for two weeks to help bridge that gap.
Universal Credit – how much you get
Universal Credit is made up of a standard allowance, which is the basic amount you get before any additional elements – for example, if you have children or are unable to work due to illness – or any deductions are taken into account.
If you work, there is a taper rate which reduces your maximum Universal Credit payment as your earnings increase. The taper rate is 55% which means 55p is deducted from your maximum Universal Credit payment for every £1 you earn.
Some people get a “work allowance” which is a set amount you can earn before your Universal Credit is reduced. The “work allowance” is worth £411 a month if you also receive help with housing costs, and £684 a month if you don’t.
Standard allowance
- Single under 25: £316.98 a month
- Single 25 or over: £400.14 a month
- Joint claimants both under 25: £497.55 a month
- Joint claimants, one or both 25 or over: £628.10 a month
Child element
- First child born before April 6, 2017: £339 a month
- First child born on or after April 6, 2017 or second child and subsequent child: £292.81 a month
- Disabled child element lower rate: £158.76 a month
- Disabled child higher rate: £495.87 a month
Limited capability for work
- Limited capability for work: £158.76 a month
- Limited capability for work or work-related activity: £423.27 a month
Carer element
Work allowance
- Higher work allowance (no housing amount): £684 a month
- Lower work allowance (with housing amount): £411 a month
Childcare costs element
- Maximum for one child: £1,031.88 a month
- Maximum for two or more children: £1,768.94 a month