The Department for Work and Pensions (DWP) is in the process of transitioning benefit claimants to Universal Credit. Universal Credit has replaced several older benefits for many UK households, such as Tax Credits, Income Support, income-based Jobseeker’s Allowance, and Housing Benefit.

Individuals currently receiving income-related Employment and Support Allowance (ESA) will also be moved to Universal Credit, with all remaining claimants expected to be contacted by September 2025. The DWP aims to complete the “managed migration” to Universal Credit by March 2026, and those yet to transition will receive a migration notice in the mail.

Claimants have a three-month deadline to switch to Universal Credit, after which their existing benefits will cease. The DWP states that 55% of individuals will benefit from Universal Credit, while 35% may be worse off initially. Those facing a decrease in benefits will receive monthly transition payments to cover the shortfall until parity is reached with legacy benefits.

Transitional protection will be provided until the new Universal Credit award matches the previous benefit amount. However, transitioning claimants must await the managed migration process to receive these payments. Upon moving to Universal Credit, there is a five-week waiting period for the first payment, although certain legacy benefits like income-related ESA may continue for an additional two weeks.

Universal Credit consists of a standard allowance, which is the base payment before adjustments for factors like dependents or illness-related inability to work. Earnings affect the maximum Universal Credit payment through a taper rate of 55%, deducting 55p for every £1 earned beyond a work allowance threshold.

The work allowance varies based on whether housing costs are included, set at £411 monthly with housing support and £684 without. Additionally, Universal Credit may include elements like the child element, limited capability for work, carer element, and childcare costs element.