What is Universal Credit Transitional Protection?
DWP will be arranging to transfer people from their existing benefits on to Universal Credit (UC) over the next few years with this process starting in 2019 and continuing until 2022. People who are claiming these benefits will be transferred:
- Income Support
- Income Based Job Seeker’s Allowance
- Income related Employment and Support Allowance
- Housing Benefit
- Child Tax Credit
- Working Tax Credit
In some situations UC will pay less than the benefits which were previously in payment for example to many people who are sick and disabled, and these people will receive Transitional Protection. If you are in this situation your UC award will include an extra amount to top up your income to the level you received on your old benefits. This is called a “Transitional Amount” and the figure will be shown separately in the breakdown benefit calculation you will be given. Only people who transfer to UC under the managed migration will get Transitional Protection. If you claim UC in other circumstances eg after a break in your claim or if you have a new partner who already receives UC you will not be given any Transitional Protection.
How long will Transitional Protection last?
The Transitional Protection can continue until the UC award increases to the same amount as the benefits you were getting before you transferred on to UC or until you lose your entitlement to UC or until you have a significant change of circumstance. If you lose your entitlement to UC or have a significant change in circumstances (see below), you lose all of your Transitional Protection from then on.
What happens if the Universal Credit rate increases?
If you have an increase in your UC entitlement eg if you have a reduction in income or have a new child or if the rate of UC goes up in the annual uprating, the increase in your UC will be offset by a reduction in the level of your Transitional Protection. This will continue until the transitional amount is reduced to nothing.
Nick and Mandy receive £1,050 per month in the benefits being replaced by UC. Their UC entitlement is only £1000 per month. They are transferred on to UC as part of the managed migration so they are entitled to Transitional Protection and their benefit is made up of £1000 Universal Credit and £50 Transitional Addition paid to ensure they are not worse off.
The following April UC rates are increased and their new UC entitlement rate is £1015 per month. They now need only a top up of £35 to make up the UC level to their previous benefit level so the make-up of their benefit is adjusted to £1015 UC and £35 Transitional Addition. They are no better off overall as their benefit level has effectively been frozen. They won’t receive any increase in income until their UC award level is higher than £1050 per month.
What happens if the UC rate decreases?
If the rate of UC you are entitled to reduces eg because your earnings increase, your transitional protection rate will not be reduced. This is so that you do not lose your work incentives. If you UC rate reduces to nil because of increases in earnings, your UC rate will be removed at a level of 63% so you will lose 63p of Transitional Addition for every £1 you earn after your UC rate is reduced to nil.
Significant Change of Circumstances
You will lose all of your Transitional Protection if you have a significant change of circumstances. Significant changes of circumstances are any of the following:
- A partner leaving or joining you
- A drop in your earnings below the level of work expected in the claimant commitment which continues for 3 months or more
- The UC award ends
- Either you or your partner or both of you stop work
- A change in your circumstance occurs which means that you lose or gain an element which makes up the UC award eg the childcare element or the housing element
If you lose your Transitional Protection you cannot regain it.