The Department for Work and Pensions (DWP) is making significant changes to the UK welfare system by scrapping four legacy benefits by the end of the 2024-25 financial year.
This shift will transition claimants of Working Tax Credit, Child Tax Credit, Jobseeker’s Allowance, and Income Support to Universal Credit.
The reform aims to simplify the welfare system, reduce costs, and make benefit payments more responsive and efficient.
Here’s everything you need to know about these changes, the reasons behind the transition, and how claimants can prepare.
Benefits Being Scrapped
The DWP plans to cancel the following legacy benefits, which will be replaced by Universal Credit:
- Working Tax Credit
- Child Tax Credit
- Jobseeker’s Allowance (JSA)
- Income Support
These benefits will be merged into the Universal Credit system to create a more streamlined and user-friendly service.
Universal Credit combines several forms of assistance into one payment, reducing errors and administrative overlap.
Why Are Legacy Benefits Being Phased Out?
The DWP is transitioning to Universal Credit for several key reasons:
- Simplification: By merging multiple benefits into one, Universal Credit simplifies the system for both claimants and administrators, making it easier to manage and understand.
- Cost Efficiency: Combining these benefits reduces the administrative costs associated with managing separate systems.
- Responsiveness: Universal Credit is more flexible, adjusting faster to changes in income, so claimants receive more accurate financial support.
- Fraud Reduction: A unified system minimizes errors and fraud, ensuring that benefits reach those who genuinely need them.
- Employment Incentives: Universal Credit is designed to encourage employment by reducing benefits gradually as income increases, making it more rewarding to take up work.
- Modern Adaptation: Universal Credit better accommodates contemporary work patterns, such as part-time and freelance work, compared to the rigid legacy systems.
These changes are part of the government’s effort to make the welfare system more efficient, responsive, and cost-effective.
Transition Process and Timeline
The DWP has outlined a phased approach for transitioning claimants to Universal Credit.
This process involves notifying claimants about when their current benefits will end and how to move to Universal Credit.
Transition Timeline
| Benefit | Transition Date |
|---|---|
| Working Tax Credit | By May 2024 |
| Child Tax Credit | By May 2024 |
| Jobseeker’s Allowance (JSA) | September 2024 |
| Income Support | April 2024 |
Notification Schedule
The DWP will send migration notices to claimants throughout 2024. Here’s a breakdown of when different groups will be notified:
| Month | Group Notified | Details |
|---|---|---|
| April 2024 | Income Support and Tax Credits with Housing Benefit | Initial notices for migration |
| June 2024 | Housing Benefit-only claimants | Follow-up notices |
| July 2024 | ESA claimants with Child Tax Credits | Specific notices for combined benefits |
| August 2024 | Tax credit recipients over State Pension age | Special instructions for older citizens |
| September 2024 | Jobseeker’s Allowance claimants | Final round of notifications |
Claimants must act within these timelines to ensure their transition to Universal Credit is smooth and does not interrupt their payments.
Financial Impact of the Transition
As the transition nears, HMRC has updated payment levels for Working Tax Credit and Child Tax Credit, marking these as the final adjustments before they are replaced by Universal Credit.
Working Tax Credit Adjustments for 2024
| Element | 2023 Amount (£) | 2024 Adjusted Amount (£) |
|---|---|---|
| Basic element | 2,280 | 2,435 |
| Couple and lone parent | 2,340 | 2,500 |
| Disabled worker element | 3,685 | 3,935 |
| Severe disability element | 1,595 | 1,705 |
Child Tax Credit Adjustments for 2024
| Element | 2023 Amount (£) | 2024 Adjusted Amount (£) |
|---|---|---|
| Family element | 545 | 545 (unchanged) |
| Child element | 3,235 | 3,455 |
| Disabled child rate | 3,905 | 4,170 |
| Severely disabled child rate | 1,575 | 1,680 |
These updates reflect the last adjustments before all beneficiaries are moved to Universal Credit.
What Claimants Should Do
The transition from legacy benefits to Universal Credit requires proactive action from claimants to avoid disruptions in their financial support. Here are the key steps claimants should take:
- Watch for Notifications: Keep an eye on letters or emails from the DWP that will outline the timeline and steps for transitioning to Universal Credit.
- Understand Universal Credit: Familiarize yourself with how Universal Credit works, particularly how payments are structured and how changes in income affect your benefits.
- Update Your Information: Ensure all personal and financial information with the DWP is accurate to prevent delays in payments.
- Seek Support: If you’re unsure about the transition, contact the DWP or use free welfare advice services to get help with moving to Universal Credit.
Impact on Claimants and Expectations
While the transition aims to make the benefits system more efficient, some claimants may face short-term challenges as they adjust to the new system.
However, Universal Credit is designed to provide more consistent and flexible support, especially for those with fluctuating incomes due to part-time or freelance work.
There has been some criticism, particularly regarding how the transition may impact vulnerable groups. Still, the government maintains that Universal Credit offers a better long-term solution for managing welfare payments.
The DWP’s decision to scrap four legacy benefits—Working Tax Credit, Child Tax Credit, Jobseeker’s Allowance, and Income Support—marks a significant shift towards a more modernized and cost-effective welfare system with Universal Credit.
Claimants must stay informed and act quickly to ensure a smooth transition to avoid payment disruptions.
As the transition progresses, it’s important for all affected individuals to prepare for the upcoming changes, understand their new entitlements, and take the necessary steps to safeguard their financial security.
FAQs
Why is the DWP scrapping these benefits?
The DWP is phasing out legacy benefits to streamline the welfare system, reduce administrative costs, and offer a more responsive payment system through Universal Credit.
Which benefits are being cancelled?
Working Tax Credit, Child Tax Credit, Jobseeker’s Allowance, and Income Support are being replaced by Universal Credit by the end of the 2024-25 financial year.
When will the transition happen?
The transition will occur throughout 2024, with different benefits phased out by specific dates, starting in April 2024 and ending in September 2024.
Will my payments be affected during the transition?
As long as you follow the steps outlined in your notification letter from the DWP, your payments should transition smoothly to Universal Credit.
What should I do if I’m unsure about the transition?
Contact the DWP or seek advice from welfare support services to ensure you understand the process and how it will affect your benefits.
