Urgent warning for nearly half a million on benefits ahead of major change coming in weeks – or risk payments stopping

HUNDREDS of thousands of people on benefits should look for letters in the post starting from next month – or they could risk losing cash.

It comes as the Department for Work and Pensions (DWP) moves those on tax credits over to Universal Credit.

From August, 244,800 letters will start going out to households in four English regions inviting them to make the move.

This figure is crunched from government data and is based on the number of households in these regions still claiming tax credits.

But these claimants will be asked to claim Universal Credit instead, under a process known as managed migration.

They will continue to receive the payments that they are entitled to once moved to Universal Credit, according to the DWP.

Those on tax credit who live in any of the following locations should get ready to check their post in August:

• West Yorkshire
• Staffordshire
• Derbyshire
• South London

Once you receive a letter, you’ll have three months to move over.

If you fail to do this within the allotted time frame, you could lose your benefit payments.

Over two million people are still on old-style legacy benefits, but the government plans to move the majority of them onto Universal Credit by the end of 2024.

In most cases, individuals will be better off following a move from legacy benefits to Universal Credit.

But 300,000 could be worse off, and should not move until they are asked to so their payments are protected, or they could lose cash.

Where an individual’s Universal Credit payment is lower than their legacy benefits entitlement, they will usually be entitled to a top-up payment known as Transitional Protection. 

This means that their Universal Credit entitlement will be the same as their legacy benefit entitlement at the point they move.

Recipients who receive a migration notice and fail to act will risk losing their current benefits entitlements.

It’s also worth noting that a change in circumstances before you receive a managed migration notice might trigger the move to Universal Credit earlier, for example a change of job or address.

But in cases like this, you won’t be eligible for Transitional Protection.

You can also choose to move over to Universal Credit from tax credits at any time – but it is best to check before doing so as 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.

The DWP has said that all households on tax credits across the UK will have been contacted about moving to Universal Credit by September.

There are two types of tax credits – working tax and child tax credit.

The benefit is worth up to up to £3,685 a year, but if you fail to renew your claim you’ll end up missing out on thousands every year.

What is Universal Credit?

Universal Credit is a welfare scheme that was designed to combine a number of old “legacy benefits” into a single monthly payment.

Whether you are eligible will depend on your individual circumstances.

You may be eligible if you meet all of the following criteria:

• You’re on a low income or out of work
• You’re 18 or over (there are some exceptions if you’re 16 to 17)
• You’re under State Pension age (or your partner is)
• You and your partner have £16,000 or less in savings between you
• You live in the UK

How much is Universal Credit?

Universal Credit payments are made up of a standard allowance and then various additional payments that depend on your circumstances.

This is how much you will get as your standard allowance each month:

• Single, under 25 – £292.11
• Single, 25 or over – £368.74
• Couple, joint claimants both under 25  –  £458.51 (for both)
• Couple, joint claimants, one or both 25 or over – £578.82 (for both)

You may also get additional payments depending on your circumstances.

You may be able to get a top-up if you have children:

• For those with a first child born before April 6, 2017, the extra amount is £315
• For those with a child born on or after April 6, 2017 or second child and subsequent child, the extra amount is £269.58
• For those with a disabled child, the lower rate additional payment is £146.31 and the higher rate is £456.89

If you have a disability you could get an extra amount depending on your circumstances:

• For those deemed to have limited capability for work, the extra amount is £146.31 
• For those deemed to have limited capability for work or work-related activity, the extra amount is £390.06

Universal Credit claimants can get an additional amount if they’re caring for a severely disabled person for at least 35 hours a week.

The amount you get is £185.86.

You can also get an increased work allowance:

• The higher work allowance (no housing amount) for someone claiming Universal Credit with one or more dependent children or limited capability for work is £631
• The lower work allowance for someone claiming Universal Credit with one or more dependent children or limited capability for work is £379.