Before the Department for Work and Pensions (DWP) switches to Universal Credit, benefit recipients are expected to lose £4,130 apiece. The alert is sent as the Department for Work and Pensions "migrates" Tax Credit applicants to the new Universal Credit system.
In the upcoming years, Universal Credit will replace six benefits: Housing Benefit, Income Support, Income-related Employment and Support Allowance (ESA), and Working Tax Credit. It will also replace Child Tax Credit and Income-based Jobseeker's Allowance (JSA).
As a result, a household has lost out on roughly £4,130 a year, or £129.4million collectively, anti-poverty charity Z2K told The Sun. Ayla Ozmen, director of policy and campaigns at anti-poverty charity Z2K, said: "These figures show that DWP has now stopped well over £100million worth of benefits for people who've missed their deadline to move to Universal Credit.”
A DWP spokesperson said: "The vast majority of Tax Credit claimants have successfully moved to Universal Credit, accessing the vital safety net provided to millions as they build towards financial independence. There is a range of support available to help people move, including extensions for those who need extra support."
The charity said: "Our primary concern is that claimants will not make a claim for UC, have their legacy benefits terminated, and experience considerable financial hardship as a result. The consequences of not claiming UC will be greater for some than for others.
"While those in the worst financial situations are likely to qualify for UC as a new claimant, they could be worse off overall once they do claim. Any disruption in their benefit payments, followed by the five-week wait for UC, and an ongoing award which may be of lower value than their legacy benefits, could cause serious harm such as accruing unmanageable debt, threats of eviction, and in some cases destitution."
The DWP is writing to people affected telling them the action they need to take if they are being migrated to the new system.