Nearly a quarter of Tax Credits claimants forced onto Universal Credit end up without any benefits at all

The Department for Work and Pensions (DWP) has released its first-ever set of figures regarding so-called “managed migration“. This is where it forces people on old-style benefits like Tax Credits to move to Universal Credit. Worryingly, the figures show that 24% of the people whom the DWP tried to migrate end up with no benefits at all – the majority of them being women.

So far, the department has not said what has happened to these people or why. However, if this pattern continues then up to 135,000 people – including children – may lose out.

Universal Credit: managed migration by the DWP

The DWP began rolling out managed migration in July 2019, as a pilot scheme. This is where the department forces people who have not yet moved to Universal Credit, either voluntarily or because of a change of circumstance, onto it. This is because the new benefit is replacing old ones like Tax Credits.

Then, the coronavirus (Covid-19) pandemic hit, so the DWP had to pause its work on managed migration. In June 2022, it said that it was aiming to get everyone on old benefits onto Universal Credit by 2024.

The DWP started writing to people in July 2022. It sent them “migration notices”, telling them they needed to move to Universal Credit. So far, there are only full statistics from July 2022 to March 2023. This is because, as the DWP noted, up to May 2023:

All households sent an MN [migration notice] have been included… However, many households will not have passed their initial migration deadline and may still make a claim to UC [Universal Credit]. These households will be recorded in the ‘In Progress’ column.

This affects April and May 2023. Therefore, the Canary has only used figures from July 2022 to March 2023. We found that:

• 82% of all managed migration claimants were women, nearly all of whom were previously claiming tax credits:

• 24% of people’s claims were closed, presumably leaving them with no benefits at all:

Of these, around 79% were women – although this figure is the total for July 2022 – March 2023:

The DWP says…

The DWP issued a caveat with these figures. It said:

It should be noted that claimants who have been sent an MN to date will not be representative of the complete population who will be sent an MN.

In particular, the vast majority so far have been single TC [tax credits] households whose likelihood of claiming UC… may be different to couple TC households and/or DWP legacy benefit claimants, the majority of whom have not yet been sent a migration notice.

However, 24% of people’s benefits stopping is a large number, and problematic. Moreover, the overwhelming majority of them being women is of concern, too. So, the Canary emailed the statisticians responsible for the analysis. Specifically, we wanted to know if they knew:

• Why the majority of claimants sent managed migration notices were women.
• What happened to the claimants whose claims were closed.

A DWP press officer originally gave us a statement, which they then retracted.

However, this is not the first time that the DWP is hearing that large percentages of people on Tax Credits are not entitled to Universal Credit under managed migration.

135,000 Tax Credits claimants potentially affected

The department performed a trial of the scheme in May 2022 in Bolton and Medway. There, the DWP found that 13% of the overall cohort did not end up claiming Universal Credit. However, for Tax Credits the figure was 23% – almost identical to the first nine months of the full rollout.

This should be a red flag to the DWP. Its defence – that the majority of claimants so far have been people on single Tax Credits – is of concern. This is because as of April 2023 there were 595,000 people falling into that category. Moreover, the majority of these people had children, and were claiming Child Tax Credits (CTC):

If the 23-24% figure of Tax Credits claimants not getting Universal Credit in the early stages of managed migration is extrapolated to the overall numbers, this could potentially mean the DWP could leave over 135,000 people without benefits.

Leaving people destitute

For those Tax Credits claimants that do end up on Universal Credit, the DWP already admitted admitted that some of them, including people with children, may be no better off. In fact, it even forecast that some families with children would be made worse off by moving from Tax Credits to Universal Credit.

In 2019, a parliamentary committee raised concerns about the DWP’s rollout of managed migration. It warned that without proper preparation, the process could:

plunge people further into poverty and could leave them destitute.

While it is not known what has happened to the Tax Credits claimants whose benefit claims stopped, there’s a risk this has happened to some of them. The DWP must urgently look at the managed migration rollout, before any more people are left worse off than they were before.

Featured image via the Guardian – YouTube, and Wikimedia