The Department for Work and Pensions (DWP) is pressing ahead with the final phase of its sweeping welfare reform, with a hard deadline now in place for the closure of older 'legacy' benefits. Millions of claimants are being moved onto the Universal Credit system, with a key group facing a final transfer date of March 31, 2026.
The Final Countdown for ESA Claimants
Among the last benefits to be fully replaced is income-related Employment and Support Allowance (ESA). The DWP has confirmed that everyone still claiming this support must be transferred to Universal Credit by the 2026 deadline. This change is part of the government's long-term plan to consolidate several older benefits, including most Tax Credits, Income Support, and income-based Jobseeker's Allowance, into a single monthly payment.
If you claim income-related ESA, you should have been contacted in the latter part of last year with your official 'migration notice'. This letter is critical, as it explains the process and gives you a three-month deadline to apply for Universal Credit. If you miss this deadline, your existing ESA payments will be stopped.
Managed Migration and Transitional Protection
The DWP is urging people to move through the official 'managed migration' process. This is vital because it is the only way to qualify for transitional protection if your new award is lower. According to DWP estimates, while 55% of people will be better off on Universal Credit, 35% will see a reduction in their income.
For those who will be worse off, monthly transition payments will be made to bridge the gap. This financial safeguard will continue until there is no longer a difference between your old legacy benefit amount and your new Universal Credit award, or until your circumstances change. It is crucial not to apply for Universal Credit voluntarily before receiving your migration notice, as this could forfeit your right to this protection.
When you do switch, be prepared for a five-week wait for your first Universal Credit payment. To help with this gap, a two-week 'run-on' payment of your existing income-related ESA will be made.
Understanding Your Universal Credit Entitlement
Universal Credit is comprised of a standard allowance, with additional elements added for circumstances like having children, caring for someone, or having a disability that limits your ability to work. The system also includes a taper rate for those in work: for every £1 you earn over your work allowance, 55p is deducted from your Universal Credit payment.
Here are the current standard monthly allowances (accurate as of the source publication):
- Single, under 25: £316.98
- Single, 25 or over: £400.14
- Joint claimants, both under 25: £497.55
- Joint claimants, one or both 25 or over: £628.10
Additional elements significantly increase the potential award. For example, the carer element is worth £201.68 per month, while the higher rate for limited capability for work-related activity adds £423.27. Support for childcare costs can be substantial, with a maximum of £1,768.94 per month for two or more children.
The move represents the most significant overhaul of the UK's welfare system in a generation. Claimants affected by the change are advised to act promptly upon receiving their migration notice and to seek independent advice if they are unsure about the impact on their household finances.
