Universal Credit roll-out: 2018-19

Universal Credit (UC) is replacing means-tested social security benefits and tax credits for people of working age.  UC aims to simplify and streamline the benefits system, improve work incentives, tackle poverty among low income families, and reduce the scope for error and fraud.  It is administered by the Department for Work and Pensions (DWP) in Great Britain, and by the Department for Communities in Northern Ireland.

Just under 7 million households are expected to receive UC when it is fully introduced. 0.7 million did so in December 2017; roll-out is around 11% complete.

The DWP originally envisaged that Universal Credit would be fully introduced by 2017, but the roll-out timetable has been pushed back several times.  Following early problems, the entire programme was “reset” in early 2013.  In 2016, the DWP began rolling-out the “Full Service” – the final digital version of UC, available for all claimant groups – using a “test and learn” approach.  The Full Service was to have been rolled-out to every part of the United Kingdom by September 2018, but in autumn 2017, following emerging evidence of problems experienced by people moving onto UC, the Government slowed the roll-out plans significantly for January-March 2018 while it introduced measures intended to ease the transition to UC.  These included abolishing the 7-day “waiting period”, increasing the amount of the advance payment people can get at the start of their claim and extending the repayment period for advances, and allowing people moving onto UC to continue to receive Housing Benefit for two weeks.  The pace of roll-out is now accelerating again – the Full Service was rolled-out to 41 new jobcentre areas in May 2018 and 61 jobcentres are expected to get the Full Service in June.

When the Full Service is introduced in an area new claims for “legacy” benefits – the benefits and tax credits UC is replacing – cannot be made (with limited exceptions).  Legacy benefit claimants do not move onto UC straight away, but a change in circumstances may trigger a move to UC. The DWP refers to this as “natural migration.”  When a person moves onto UC, it will not normally be possible to move back to legacy benefits – the “lobster pot” rule.

The DWP has not yet announced detailed plans for the final managed migration stage.  The OBR estimates that 1.9 million individuals and families will be moved onto UC through the managed migration process – mainly people receiving income-related Employment and Support Allowance and families on tax credits.  Where claimants moved to UC via managed migration are entitled to less support than they were receiving through legacy benefits and tax credits, they may be entitled to a top-up payment so that they do not lose out in cash terms at the point of transfer.  This “transitional protection” will continue until the claimant’s circumstances change significantly, or their UC entitlement “catches up”.

Transitional protection will only be avilable to claimants moved onto UC by managed migration. For legacy benefit claimants who move onto UC in the meantime – following a change of circumstances triggering a claim for UC, for example – there is no such protection and their UC award may be less than their previous benefits and tax credits.