Universal Credit UK: DWP ‘will not reverse’ legacy benefit issue costing claimants

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Universal Credit replaces a number of legacy benefits and moving claimants onto the new system has proven difficult and controversial. In May, Thérèse Coffey was questioned on the issue of self-employed people on Working Tax Credits who were encouraged to move over to Universal Credit only to find they lost out as a result.

In her response, Ms Coffey confirmed at the time: “I am very aware of the issue he is bringing to my attention, and I am actively looking at that particular scenario, where people, not realising some of the eligibility rules, have then made the application and are no longer effectively going to receive Working Tax Credits.

“I cannot give an answer to my right honourable friend or the House today, but I assure him that I am looking very carefully into what changes we could make to address that situation.

“I have already asked for the website to be updated, so that people are crystal clear when they apply.”

This problem was raised again this week (September 30) as the DWP took questions from the Work and Pensions Committee.

Steve McCabe, the Labour MP for Birmingham, had the following to say: “You said early in the pandemic, that you would look carefully at the people who had lost out because they wrongly claimed for Universal Credit.

“Now, I noticed in your letter, you’re saying that you don’t intend to return them to legacy benefits, fair enough, but what are you going to do?

“Are you still looking, at what you can do for these people who have lost out?”

In her response, Ms Coffey initially noted the steps the DWP have already taken to ensure these problems don’t arise again. She said: “Well, it’s always been an important part I think on our website of encouraging people to use an independent benefits calculator.”

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She went on to explain this benefits calculator should ensure that people apply for the most appropriate benefits.

However, she went on to confirm legacy benefit claimants who struggled with this will not see reconciliations or compensations for the problems they may have faced.

As she continued: “We did look at it carefully.

“And I think it was a decision that was made that we would not reverse [the problems] as you’ve just pointed out.”

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Legacy benefits are mostly closed off for new claimants but some of them may still be claimed under specific circumstances.

Existing legacy benefit claimants can still receive payments from them, but by 2024, they will be replaced by Universal Credit.

Universal Credit will be replacing the following:

  • Housing Benefit
  • Income-related Employment and Support Allowance (ESA)
  • Income-based Jobseeker’s Allowance
  • Child Tax Credits
  • Working Tax Credits (WTC)
  • Income Support

Legacy benefit claimants will not need to move to Universal Credit unless they see a change in their circumstances, such as splitting from a partner or moving.

Additionally, the DWP may ask legacy benefit claimant to move to Universal Credit by sending them a letter.

Claimants can also choose to move onto Universal Credit whenever they want to but they will not be able to go back to the benefits it’s replacing once they do.

Claimants who move onto Universal Credit from income-based JSA, income-related ESA or Income Support may be eligible for a two week run-on payment worth up to two weeks of what they were previously receiving.

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