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Three-week warning for anyone on housing benefit over huge change to payments

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A HUGE change is coming for tens of thousands on housing benefit within weeks – and households need to act.

Those claiming the legacy benefit and no others will be asked to move to Universal Credit in June.

Millions are being moved across to Universal Credit

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Millions are being moved across to Universal CreditCredit: Alamy

Refuse to do so, or forget, and you could miss out on £1,000s worth of cash to help cover essential bills and the general cost of living.

Housing benefit is paid to households struggling to pay rent due to unemployment or a low income.

But the Government is transitioning two million claimants on legacy benefits to Universal Credit or Pension Credit by March 2025.

The move, known as managed migration, is being rolled out in a bid to simplify the benefits system.

Managed migration started in May last year after a successful pilot in July 2019.

Households are being contacted via letters in the post which tell them how to make the move from their old benefit to Universal Credit.

Once you receive a letter, you have three months to move over, or you could lose your current benefits.

Thousands of households receiving tax credits-only have already received these notices.

Income support claimants and those con tax credits with housing benefit were sent letters from last month.

But those on housing benefit only are set to start receiving their letters in June.

Universal Credit payments rise for millions

Anyone getting Employment and Support Allowance (ESA) along with child tax credits will then start being asked to switch from July.

Meanwhile Jobseekers Allowance (JSA) claimants are being contacted from September.

The Sun previously reported that those claiming tax credits who are over state pension age will be asked to apply for either Universal Credit or pension credit from August.

Anyone claiming income-related ESA alone will not be moved until 2028.

In 2024/25 the DWP estimates that around 440,000 will be contacted, with a breakdown as follows:

  • Tax credits and housing benefit – 120,000
  • Income support – 110,000
  • Housing benefit only – 100,000
  • Income-based ESA with child tax credits – 90,000
  • Income-based JSA – 20,000
  • Tax credits only – 10,000

Will I be better off on Universal Credit?

Around 1.4million will be better off on Universal Credit, the government calculates.

A further 300,000 will see no change in payments, while around 900,000 will be worse off under Universal Credit.

What is managed migration?

UNIVERSAL Credit is replacing six benefits under the old welfare system, commonly called legacy benefits. They are:

  • Working Tax Credit
  • Child Tax Credit
  • Income-based Jobseeker’s allowance
  • Income support
  • income-related employment and support allowance
  • Housing Benefit.

If you’re on any of these benefits now, you can choose to move over – but you might not be better off.

You should consider carefully what moving over means for your money, as you can’t move back once you’re on Universal Credit.

Using an online benefits calculator can help you compare and are free and easy to use from charities such as Turn2Us and EntitledTo, and it’s also worth asking them for advice.

You may be moved over to Universal Credit if you have a change in circumstances, like moving home, a change in working hours or a have a baby.

But eventually everyone will be moved over to Universal Credit.

This is known as “managed migration” .

Of these, around 600,000 are expected to get top-up payments if they move under managed migration, so they don’t lose out on cash immediately.

The majority of those – around 400,000 – are claiming Employment Support Allowance (ESA).

Around 100,000 are on tax credits while fewer than 50,000 each on other legacy benefits are expected to be affected.

Examples of those who may be entitled to less on Universal Credit according to the government include:

  • Households getting ESA who and the Severe Disability Premium and Enhanced Disability Premium
  • Households with the lower disabled child addition on legacy benefits
  • Self-employed households who are subject to the Minimum Income Floor after the 12 month grace period has ended
  • In-work households that worked a specific number of hours (eg lone
    parent working 16 hours claiming Working Tax Credits)
  • Households receiving tax credits with savings of more than £6,000 (and up to £16,000)

But they could miss out on any future increase to benefits and see payments frozen.

Those who move voluntarily and are worse off won’t get these top-up payments and could lose cash.

Those who miss the deadline and later make a claim may also not get this transitional protection either.

The clock starts ticking on the three-month countdown from the date of the first letter, and reminders are sent via post and text message.

There is a one-month grace period after this during which any claim to Universal Credit is backdated and transitional protection can still be awarded.

Meanwhile, experts have previously warned manage migration might be a struggle for people with mental health problems, learning disabilities and dementia.

Charities including Mind, The Trussell Trust, Turn2Us and the Money and Mental Health Policy Institute have said around 700,000 with could struggle with the application process.

More than 20 organisations have called on the government to halt managed migration to fix flaws in the system which those at risk could fall through.

A DWP spokesperson previously told The Sun: “We are committed to helping everyone transition to Universal Credit as smoothly as possible, as part of our work to streamline the benefits system, and recent research showed tax credit claimants have been able to navigate the Universal Credit system to make a new claim with minimal support.

“Benefits are only stopped as a last resort. Claimants are contacted multiple times within a three-month period to remind them of the action they need to take and support is also available via our dedicated migration helpline.”

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

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