Why does it matter if someone claims UC when they don't have to?
Many people are worse off on Universal Credit when compared to the legacy benefits they are on / have been claiming.
UC claimants can find:
- They were financially better off on the legacy benefit system.
- They struggle with the responsibilities of UC ie managing their money monthly / paying their rent themselves.
- They struggle with the conditionality under UC and would have less work search / work preparation on the legacy benefit system.
- They have significant deductions being taken from their UC and these would be less on the legacy benefit system.
NOTE: This is not an exhaustive list.
When someone makes their claim for UC, any legacy benefits* that they are entitled to will be brought to an end, and new claims for legacy benefits* will then be closed off^ to them - ie there's generally no going back! (click here for more information.)
So, claimants who don't have to claim Universal Credit and who would be worse off on UC, are better off not claiming it. But, if their only option is UC, then any delay in claiming UC will probably mean that they lose out.
The trouble is, the rules are complicated!
The best thing a claimant can do, if they are told they have no option but to claim UC, is to get specialist advice from a Welfare Benefits Adviser without delay.
Won't claimants have to go onto UC soon anyway?
The DWP's plan is that all those claimants that need to be on Universal Credit will be moved onto it by the end of 2028 (timetable here). So for some claimants this is a long way off.
In April 2022 the DWP estimated that 35% of existing legacy benefit claimants would be worse off on UC. Some claimants can be over £150 a week worse off.
Where someone opts to claim UC ie moves onto UC by 'natural' or 'voluntary' migration, they receive the level of UC that they are entitled to. But if they stay on the legacy benefit system and get moved onto UC by 'managed migration' then the government have promised many claimants transitional protection (in the form of a Transitional Element) if the level of UC they are entitled to is less than the level of legacy benefits they have been getting.
If someone doesn't have to claim UC yet, many - but not all - are better off not doing so.