First the Canary, now the CPAG sounds the alarm over Tax Credit claimants not getting Universal Credit

Tax Credits on phone Universal Credit DWP benefits
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The Child Poverty Action Group (CPAG) has issued a warning about Tax Credits. It’s over the Department for Work and Pensions (DWP) and its managed migration process for claimants over to Universal Credit. The charity says that, potentially, 28% of Tax Credits claimants may lose all their benefits when the DWP forces them onto Universal Credit. It follows analysis from the Canary in August which produced similar findings.

Tax Credits and managed migration

Managed migration is where the DWP forces people on old-style benefits like Tax Credits to move to Universal Credit. Recently, the department has been doing this for Tax Credit claimants, and has released some figures on the results. As the Canary wrote on 21 August, we analysed the DWP’s data between July 2022 and March 2023. This was mostly for single Tax Credits claimants. 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.

As we wrote at the time:

24% of people’s benefits stopping is a large number, and problematic. Moreover, the overwhelming majority of them being women is of concern, too.

Overall, the Canary found that 135,000 single Tax Credits claimants could lose the benefits with the move to Universal Credit. Now, the CPAG has also done similar research – and its come out with a very similar result.

Universal Credit leaving people without benefits

The CPAG has also looked at the same figures. However, it used a smaller window of time – between November 2022 and March 2023. As it noted on its website, it found:

only two thirds of people (1,800) sent a migration notice between November 2022 and March 2023 made a successful UC [Universal Credit] claim before their migration deadline. A further 5 per cent (140 claimants) made a claim after their deadline had passed. Twenty-eight per cent (770 claimants) did not claim UC at all and had their current benefit payments terminated.

Read on...

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So, the CPAG says 28% of single Tax Credits claimants ended up with no benefits at all. It predicts that, provided the DWP rolls out managed migration at its planned pace (500,000 households by April 2024):

If the proportion of ‘no-claims’ stays at 28%, 140,000 households could have their current benefits stopped.

However, there is a problem with the CPAG’s ‘140,000 households’ figure. It uses the 28% the charity found for single claimants only, whereas the 140,000 figure is based on the DWP moving 500,000 claims of all types of Tax Credits over to Universal Credit by the end of March 2024 – not just single claimants. As the department previously 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.

The point being, it might be that fewer families on Tax Credits will lose their benefits than the number of single people who lost theirs. So, the CPAG’s figure of 140,000 should be approached with caution. The Canary previously put the figure at 135,000 people across the entire cohort of single Tax Credits claimants – not just up until April 2024.

‘Significant’ consequences for claimants

Regardless, the fact that both the Canary and CPAG have both come up with similar figures for single claimants is extremely worrying. As the charity summed up [pdf, p11]:

In some cases, the claimant will have made an informed choice that they did not want to move to UC. But for many claimants the financial consequences of not moving to UC will be significant and the DWP has not published data on the income lost by those who did not to move to UC. Even those with small tax credit awards will miss out on forthcoming cost of living payments worth £600, and may miss out on other kinds of support accessed through UC (such as money towards childcare costs).

It’s crucial that the DWP improves the managed migration process to eliminate cases where people do not move because they have not fully grasped the financial implications or have found the process inaccessible.

It is highly unlikely the DWP will “improve” managed migration, unless it’s forced to. The CPAG has previously brought successful court cases on Universal Credit against the DWP. So, it might like to start considering another one now.

Featured image via UK government – screengrab

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