Nearly ten years after the initial timetable said it would happen, we’re finally getting on to the really tricky part of the Universal Credit (UC) rollout. Welcome to the whacky world of Managed Migration and its best friend, Transitional Protection.

Managed Migration is the name DWP has given to the process of forcing claimants to move off their old benefit and on to UC. It has affected around 300,000 households already, although it only really took off last Autumn when the DWP ramped-up the number and range of Tax Credit claimants getting migration notices (the official way of telling them to move on to UC).

For remaining Tax Credit claimants, anyone who hasn’t received a migration notice yet should receive one in the next 12 months. If DWP’s plans come to fruition, the final group, Employment and Support Allowance claimants, will migrate in 2028.

Why is Transitional Protection important?

The problem that Transitional Protection is meant to solve is that UC creates winners and losers. This is because the amount of help UC provides is worked out in a different way to the pre-UC ‘legacy’ system (see our Universal Credit natural migration blog from 2019 for more).

While DWP doesn’t mind people getting less on UC if they move due to a change of circumstances, it was deemed a bad look to pay less to those going through managed migration when, in effect, they are forcing customers to switch product.

So, Transitional Protection was invented to ensure that, where someone was made to move onto UC, they will not be worse off, at least on the date that they switch benefits.

The way this is put into operation is that, for people claiming UC because of a migration notice, DWP automatically adds an extra top-up element to their award if they are worse-off. This extra amount is a Transitional Protection element and it works in a completely different way to the rest of UC, bringing with it new complexities that claimants need to be aware of.

One of these complexities is that the timing of when to move can be important, particularly if someone will be worse off on UC.

Of course, some people receiving a migration notice will get a nice surprise and find they will get more from UC than Tax Credits. If the other features of UC (such as the direct rent payments, claimant commitment and needing to manage things online) don’t put them off, households that find they are better-off on UC should claim as soon as possible.

But two-thirds of households moving after receiving a migration notice will receive less (according to the latest DWP statistics), meaning Transitional Protection will be added to their award, and so, for this group, the decision about when to claim can make a difference.

Catch a benefits rate rise if you can

To put the conclusion first…

If the deadline date on your Migration Notice is after 8 April 2024, you may want to delay your claim for Universal Credit until after this date when benefits rates are due to rise.

As the migration notice explains, claimants have three months from receiving their notice to make a claim for UC before their Tax Credits end. So, for anyone receiving a migration notice between now when rates are increased, delaying their claim for UC until after rates rise could mean they will be financially better off from 8 April onwards.

The reason for this is, as its name suggests, Transitional Protection is only transitional (and it can also only go in one direction - downwards). A helpful explanation comes from DWP’s guidance: "Transitional protection payments are not permanent. They can decrease or end if your Universal Credit entitlement increases."

One of the ways UC entitlement increases is when benefits rise (see [i] for an exception) from 8 April by 6.7%. Here’s an example to show the impact:

	Migration before 8 April	Migration after 8 April
Max indicative UC	£1,019	£1,087
Less 55% taper rate	£412.50	£412.50
Indicative UC	£606.24	£674.50
Legacy total	£665.90	£710.52
Transitional Protection  (until 8 April)	£59.66	n/a
Transitional Protection  (after 8 April)	£0	£36.02

 

In the above example, the claimant will initially receive a £59.66 monthly Transitional Protection element if they move before 8 April. However, the increase in their UC award of £68 due to uprating will erode this to £0 if it comes after their first assessment period. If they wait until after 8 April to move, their Transitional Protection element will be £36.02 and they will receive it in every assessment period until April 2025 (assuming they have no other changes).

Protecting household incomes when every penny counts

UC creates winners and losers but these have not been evenly distributed as the new benefit has rolled-out. The groups that are most likely to be worse-off under UC are the ones who have been left to the end and who Managed Migration is intended to pick up.

Where people let us know they've received a Managed Migration notice, we've added guidance to our Benefits Calculator explaining what it means, how much they might expect in Transitional Protection and what they need to do next. The Managed Migration flag (see image below) then links to our Transitional Protection help page for further information.

Sample Managed Migration flag from the entitledto Benefits Calculator

We know DWP wants to move everyone on to UC to complete the reform but, in the meantime, this means claimants need to pay close attention to what their move means for their household incomes, especially during the cost of living crisis where every penny counts.

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[i] One of the groups who might not benefit from the rates rise from 8 April is those who already receive Transitional Protection. For this group any increase in UC will be offset by a reduction in their Transitional Protection. Only when someone’s Transitional Protection has been reduced to £0 will regular benefit increases lead to an rise in the amount of UC they receive.