Universal credit and ‘natural migration’

26 October 2016
Issue 254 (October 2016)

Simon Osborne looks at the circumstances in which a claimant with current entitlement to a ‘legacy’ benefit can end up on universal credit (UC) following a change in circumstances.

What is natural migration

‘Migration’ is the word in common use for the process by which a claimant with a current award of a ‘legacy’ benefit (income-based jobseeker's allowance (JSA), income-related employment and support allowance (ESA), income support(IS), housing benefit(HB), child tax credit (CTC) and working tax credit (WTC)) has that award (or those awards) terminated, instead being obliged to rely on UC for means-tested support. Under current plans, the DWP intends to start an official ‘managed migration’ process in 2019. This will see the DWP mandatorily terminating current legacy benefit awards and replacing that with a claim for UC. In this process, transitional protection will apply for those whose UC award is lower than their legacy benefit entitlement. The process is due to be complete by March 2022.

By contrast, ‘natural migration’ is the process by which a current claimant can end up, in effect, being obliged to claim UC instead of legacy benefits for means-tested support, completely outside of the managed migration process. No transitional protection will apply. Natural migration is possible at any time, including before 2019. It is more likely to occur in UC full service areas, but can occur in UC live service (or gateway) areas too.

How does natural migration happen?

Actual transfer to UC is triggered where the claimant is not able to get a new award of legacy benefit, is in effect obliged to claim UC instead, and indeed claims UC. Broadly, an affected claimant: (1) finds that following a change in her/his circumstances, s/he cannot make a new claim for a legacy benefit; (2) s/he consequently claims UC instead; and (3) all entitlement to legacy benefits is then terminated.

More specifically, making a new claim for JSA, ESA or UC can abolish income-based JSA and income-related ESA for an affected client. In live service areas, this will happen following such a new claim where the claimant satisfies the gateway conditions. In full service areas, this will happen in any case where there is such a new claim.1 Again, in full service areas, new claims for the remaining legacy benefits (IS, HB, CTC and WTC) are not possible.2

In both live service and full service areas, all awards of IS, HB, CTC and WTC are terminated where a claim for UC is made and the claimant meets the basic conditions for UC. Being entitled to UC means not being entitled to those benefits (income-based JSA and income-related ESA will have been abolished by the UC claim).3

When is natural migration likely

Given that the process is not automatic, the key factors for a current claimant will usually be a change of circumstance that prompts a new claim.

Note: there are currently no clear rules or guidance on when natural migration should or should not occur. Dispute is already occurring regarding ESA pending appeal (see below). What follows is based on a reading of the law and understanding of likely DWP/HMRC/local authority approaches.

A new claim for JSA, ESA or UC will abolish income-based JSA and income-related ESA for the claimant in any case where s/he lives in a full service area, or where s/he lives in a live service area and satisfies the gateway conditions. A new claim for UC will trigger the loss of legacy benefits in any case where the claimant lives in a full service area, or where s/he lives in a live service area and satisfies the gateway conditions.

New claims for legacy benefits may result in the claimant finding that s/he cannot get them and so feeling effectively obliged to claim UC instead. The clearest examples will arise in full service areas, as in live service areas an additional requirement will be that the claimant satisfies gateway conditions.

Likely examples include:

  • an ESA claimant fails the work capability assessment (WCA) and tries to claim JSA pending a mandatory reconsideration. In a full service area, this will always result in the abolition of income-based JSA and income-related ESA. In a live service area, this will not happen if the claimant does not satisfy the gateway conditions – eg, because s/he has already requested a mandatory reconsideration of the WCA failure;
  • a JSA claimant in a full service area becomes sick and tries to claim ESA instead;
  • a claimant in a full service area not already on tax credits has a first child and tries to claim CTC;
  • a lone parent loses her/his entitlement to IS when her/his youngest child turns five and tries to claim JSA;
  • someone in a full service area on JSA becomes a carer and cannot manage JSA conditions – so tries to claim IS instead;
  • a couple separates or forms and there are attempts to make new IS/JSA claims.

When is natural migration unlikely

Changes should not result in a UC claim effectively being required if they merely lead to a current award or payment of a legacy benefit being changed rather than prompting a new claim. This applies both in full service and live service areas. Likely examples include:

  • a claimant already on tax credits (WTC or CTC or both) has a child;4
  • a claimant on HB moves to new accommodation within the same local authority area and continues to qualify for HB;5
  • the youngest child of a lone parent on IS has a birthday but is still aged under five;
  • a claimant on JSA receives a sanction (also note that an application for a hardship payment does not constitute a new claim for JSA);
  • an ESA claimant fails the WCA, requests a mandatory reconsideration, ultimately appeals and gets ESA pending appeal, but at no point makes a new claim for ESA, JSA or UC. However, in some full service areas at least, the DWP is claiming that this is not possible and the claimant can only get UC pending appeal and thereafter. See below.

ESA pending appeal

As seen above, if a claimant in a full service area has tried to claim JSA pending mandatory reconsideration or appeal, that will have triggered the abolition of both income-based JSA and income-related ESA for her/him.

It is strongly arguable that if no new claim for JSA, ESA or UC is made, then the UC rules are not engaged and there is no reason why the claimant could not be entitled to ESA pending appeal under the usual rules. Entitlement to ESA pending appeal does not require a new claim for ESA.6

However there are reports of some claimants being told that it is not possible to get ESA pending appeal in a UC full service area. No legal basis for that view has been advanced. Some have reported being able to convince the DWP, using the argument above, that it is indeed possible to get ESA pending appeal in this situation.

Please be aware that welfare rights law and guidance change frequently. Older Bulletin articles may be out of date. Use keywords or the search function to find more recent material on this topic.

  • 1. For gateway areas, the basic rule on abolition is at Article 4 and the gateway conditions at Schedule 5 of SI 2013 No.983. For full service areas, individual Commencement Orders repeat this but omit gateway conditions: for example, Article 4(2)(j) of SI 2014 No.2321, which originally made this provision in specified Warrington postcodes, is amended so as to remove reference to gateway conditions by Article 5(2)(b) of SI 2015 No.596.
  • 2. Article 7 of SI 2015 No.634, applied in all full service areas by individual Commencement Orders
  • 3. Regs 8 and 5 Universal Credit (Transitional Provisions) Regulations 2014, No.1230
  • 4. Article 7 para (5) of SI 2015 No.634, applied in subsequent Commencement Orders, provides that the bar on new claims does not apply to a claim for tax credit where the person is already entitled to CTC or WTC.
  • 5. The change of address within the same local authority should be treated as a change of circumstances. Reg 79(2A) of the Housing Benefit Regulations 2006 indicates such a move is a change of circumstances. In practice, some local authorities may issue a new claim form for operational reasons; but this does not in itself mean that the claim has actually terminated.
  • 6. Reg 3(j) Social Security (Claims and Payments) Regulations 1987, No.1968