Transitional protection for universal credit claimants

Managed migration is the process by which DWP transfers people with live claims for existing benefits to universal credit (UC). The managed migration pilot started in July 2019. The government has the power to enact regulations managing the process.[1]

Natural migration occurs when a claimant of legacy benefits (for example, housing benefit or income support) has a change in circumstances which means that they are no longer entitled to that benefit and have to claim UC.

The term 'migration' might imply an automatic process of transfer, however both managed and natural migration require the claimant to actively make a claim for UC.

Process of managed migration

The regulations allow the DWP to send a migration notice to a person claiming existing benefits. This gives a date by which they have to claim UC, known as the deadline day.[2] The deadline day must be at least three months after the migration notice, but can be changed to a later date in certain circumstances.[3]

If the claimant makes the claim before the deadline day, then in most circumstances, entitlement to UC commences on the date of the claim.[4] A UC claim triggers an end to most existing benefits, and these benefits end on the day before the UC claim starts.[5] Payment of housing benefit continues for two weeks.[6]

If a person does not claim UC by the deadline day, entitlement to most existing benefits stops, although housing benefit is paid for two more weeks.[7]

Claims made within one further month are treated as having been made in time and automatically be backdated to the deadline day.[8] However, if made after this time, a claim is treated as new. In these circumstances, there is no transitional protection.

Transitional protection ensures that most claimants are not worse off as a result of the managed migration from their previous benefits to UC. To benefit from transitional protection, a claimant has to claim UC by the date quoted in the migration notice (the deadline day) or less then a month after.[9]

Transitional protection applies where the total award that a household would receive in the first month of universal credit is less than the total award of benefits and tax credits that the household receive at the point of managed migration.[10] Transitional protection is achieved by including an extra element of UC in the claim to the value of the difference (the transitional element).[11]

Any sanction applicable to a household's entitlement is ignored in the calculation.[12]

The Court of Appeal has ruled that denying transitional protection to UC claimants who are financially worse off as a result of having their legacy benefits terminated in error and being prevented from re-claiming them on the discovery of the awarding authority’s mistake, is manifestly without reasonable foundation and contrary to Article 14 of the European Convention on Human Rights.[13]

Transitional protection does not apply to natural migration to UC, for example as a result of a new claim or a change of circumstances. There is an exception for disabled claimants who are in receipt of the SDP element.[14]

Disabled claimants

The Court of Appeal found the £80 fixed-rate transitional payment scheme for claimants previously entitled to severe disability premium (SDP) who migrated onto universal credit naturally to be unlawful.[15]

This was because the difference in treatment between this group and the 'managed' migrants, who, as a result of different regulations,[16] would be prevented from migrating to UC naturally and would receive more generous transitional payments was manifestly without reasonable foundation.

The benefit cap

The benefit cap applies to claimants who are part of the managed migration process unless they are exempt. Under the current rules, there is no transitional protection to mitigate its effects.[17]

This means that where:

• a claimant has had their housing benefit reduced to less than the minimum amount, the reduction is also incorporated into the universal credit claim

• reducing housing benefit to the minimum amount left the claimant with benefits above the cap level, no further reduction will have been made. When the claimant moves to UC, however, there will be further reductions to the level of the appropriate cap

Reduction of amount

If other elements of a claimant's UC award increase, there is an equivalent reduction in the transitional element until the transitional element reduces to zero. This may mean that if, for example, a person's rent increases by £15 with a consequent increase in their housing cost element, they are no better off because of the effect on the transitional element.

Exceptions

If the amount awarded for childcare costs changes, the transitional element is unaffected.[18]

If a claimant starts receiving the limited capability for work related activity (LCWRA) element to replace the limited capability for work (LCW) element, the transitional element is reduced by the difference between the two amounts.[19]

Ending protection

The transitional protection lasts until there is no shortfall between the amount awarded under UC and the amount previously received or until:[20]

• a partner leaves or joins the claimant's household

• the claimant's earnings fall below the level at which they would be expected to look for work for three consecutive months

• the ending of the universal credit's award

If an award of UC which included a transitional element ends because of an increase in earned income and the claimant makes a fresh (successful) claim within three months, the transitional element is also included in the new award.[21]