DWP benefit warning ahead of Universal Credit shake-up

The Department for Work and Pensions (DWP) has been warned that thousands could suffer in the upcoming Universal Credit shake-up. The caution comes from a report by the Public Accounts Committee (PAC), which investigated the DWP's plan to shift those receiving "legacy benefits" to the newer form of Universal Credit.

Under the DWP's scheme, individuals are required to apply for Universal Credit within the span of three months. Missing this window will lead to a halt in their benefits support.

However, the DWP stated that this extremity is only exercised as the ultimate step following several failed attempts at engagement. The PAC report has brought light to the DWP's expectation that about 4% of current legacy benefits recipients may not migrate to Universal Credit.

Claimants who will be impacted by the proposed changes include those receiving Working Tax Credit, Child Tax Credit, Housing Benefit, Income Support, income-based Jobseeker's Allowance, and income-related Employment and Support Allowance. As of March last year, approximately 2.2 million households were on legacy benefits.

The committee's report highlighted: "Although the department expects only around 4% of these claimants will not switch to Universal Credit, we would be very concerned if large numbers of these people did not transfer and were to lose their benefits. It is vital that the department helps these claimants to make the switch, including offering face-to-face support and making sure people fully understand the process, including the arrangements for transitional protection."

A 21 per cent of households claiming legacy benefits haven't made the switch to Universal Credit, even after receiving a notice to change resulting in their benefits being cut off. This is according to an alarming report by the National Audit Office (NAO) from back in February.

Almost all these homes had been relying on Tax Credits. Dame Meg Hillier, Chairwoman of the PAC, stated that they've been "scrutinising Universal Credit since its inception", recognising that it brings about a "massive" overhaul to the way benefits are managed that will have "impact millions of people".

Expressing her concerns she said: "This means if the transition from legacy benefits to Universal Credit fails even an small proportion of people, it will lead to real-world misery for thousands. The DWP must make sure that people are not cast into financial hardship due to a bureaucratic change, and that robust support is in place for those vulnerable claimants who need it most. The DWP argues that an increase in fraud across society is a reason for high rates of fraud and error related to universal credit, rather than laying out a plan for how it is tackling the problem."

In response, a spokesperson from DWP remarked: "There is a range of support to help people move, including dedicated helplines, extensions and transitional protection for those who need it. Universal Credit is having a sustained positive impact on the jobs market, with people on Universal Credit more likely to be in work within three, six and nine months of their claim."