Most areas within the UK including Birmingham, Solihull and Coventry are now all full service areas for Universal Credit –and this means that practically all new claims for what would have been one of the benefits that is ending (Income Support, Income Based Job Seekers Allowance. Income Related Employment and Support Allowance, Housing Benefit, Child Tax Credit and Working Tax Credit) will now trigger a claim for Universal Credit. These 6 benefits are called legacy benefits.
There are two exceptions for single parents and people who previously received Severe Disability Premium.
The first exemption applies if a single parent or member of a couple is responsible for 3 or more dependent children, they will claim a legacy benefit such as (income based) Jobseekers Allowance and Child Tax Credit if they make a claim before the end of January 2019. If they need to make a new claim after this date they will need to claim Universal Credit (UC)
The second exemption concerns people who are in receipt of Severe Disability Premium as part of their award of Employment and Support Allowance, Income Support, Job Seekers Allowance or Housing Benefit. This group are prevented from claiming Universal Credit after 16th January 2019 as they would be worse off under Universal Credit.
There are some circumstances where new claims for UC are not required. This is an area where DWP are frequently giving incorrect advice and, as many people will be worse off under Universal Credit, it can be important to remain on the legacy benefits system for as long as possible. There are a small number of people who are better off under Universal Credit. You should ask for advice if you are not sure if you will be better off or worse off.
This article looks at some of the more common changes of circumstances and analyses which change will trigger a claim for Universal Credit and which will not.
Situations that WILL trigger a claim for Universal Credit in a Full Service area
- A claim for Employment and Support Allowance (income -related) that has been refused and is NOT challenged. This could be either a new claim made prior to the postcode going full service and the decision made afterwards, or an existing claim that has been refused following a review. If there is no challenge the claimant must then claim Universal Credit (unless they have 3 or more dependent children)
- If the claimant DOES challenge the decision and chooses to claim an alternative benefit during the Mandatory Reconsideration (MR) stage this will trigger Universal Credit – and even if the MR or ultimate appeal is successful the claimant will remain on UC. (see below for when this situation may be averted)
- A claimant in receipt of (income-based) Jobseeker’s Allowance (JSA)becomes incapable of work
- An employed person loses their job – this may mean a claim for New-Style JSA (the old contributory JSA) with a top up of UC if there are family responsibilities or housing costs for example.
- A claimant who moves from one local authority to another and has housing costs within that new area and this is a full service area.
- A single parent or member of a couple who has their first child (unless there is already a Working Tax Credit claim in payment)
- A homeless person on JSA (Income Based) (or no benefit) is re-housed and needs to claim housing costs for rent.
- A single parent is on income Support and their youngest child turns 5.
- A single person or lone parent separates from a working partner and needs to claim benefit for the first time
- 2 single people, each in receipt in receipt of benefits, one for example in receipt of UC and the other (IB) JSA get together and form a relationship. They will have to submit a joint claim – and this will be for UC.
All of the above will trigger a claim for Universal Credit and the claimant may find themselves worse off financially.
NOTE: The above situations are described as “Natural Migration” and there is no Transitional Protection (paying the UC at the same rate as the legacy benefit) – so certain premiums may be lost. In addition lone parents whose child turns 5 may find, if they have several other children, and rent costs, that they now face a higher benefit cap as the balance of the cap can be taken from the whole UC entitlement and not just Housing Benefit as under the legacy system.
Claimants who are transferred to UC by the DWP between 2019–2023 come under “Managed Migration” and will retain Transitional Protection so that they will either have no loss in income on transfer to Universal Credit or only partial loss. The precise rules on this are still to be passed by the Government.
What changes of circumstances will NOT trigger a claim for Universal Credit?
The following examples of a change in circumstances will NOT trigger a claim for Universal Credit.
- A single parent/couple with children has another child – if applicable this will simply be added to their existing Child Tax Credit claim – if it is their third child and no exemption applies they will not receive CTC for that child – but will receive Child Benefit and any future disabled child element on CTC if applicable.
- A claimant is in receipt of Child Tax Credit and starts work – they can simply, if applicable, inform tax credits and a Working Tax Credit claim can be added (if no Child Tax Credit claim is in payment then this would trigger a UC claim)
- A claimant in receipt of Housing Benefit moves to another address within the same local authority – if they are still entitled to HB they should contact their local Benefit Service and inform of a change in address – they should NOT say they wish to make a new claim for HB as this may cause confusion and make the local authority advise that they need to claim UC – we are aware that this has already happened in Birmingham.
- A claimant on (IB) JSA has a sanction and claims a Hardship Payment – a claim in these circumstances will not trigger a UC claim but a claim as sick would.
- ESA refusal (as above) – if a claimant requests a Mandatory Reconsideration but DOES NOT claim an alternative benefit no UC claim is triggered.
In this case, if the MR is successful the claimant returns to ESA, if it is not successful, then as soon as any appeal is lodged, most claimants can return to ESA. You should ask an experienced benefits adviser whether or not you satisfy reg 30 when you are considering challenging a decision.
There is a lack of knowledge within DWP call centres about the precise rules about who needs to claim Universal Credit and who does not and this means that many claimants are being told they have to claim UC when there is no requirement and they are not being made aware of the implications of this decision.