Disabled claimants losing out by hundreds of pounds a month through hidden impact of universal credit

Disabled people have suddenly become up to £200 pounds a month worse off because of unexpected impacts of being moved from their old “legacy” benefits onto universal credit.

Disabled People Against Cuts (DPAC) has been hearing from disabled people who have been hit hard in two different ways by the migration process, neither of which appear to have been predicted by the Department for Work and Pensions (DWP).

The impact has come despite disabled people being told that they would – at least initially – be no worse off on universal credit than on their previous benefits.

The problems impact on support provided to disabled people by their local councils.

DPAC is now considering whether a legal action might be possible, and it is now looking for disabled people who are eligible for legal aid and might be willing to take a legal challenge with DPAC’s support.

DPAC has been hearing of two ways in which the migration process has hit disabled people in unexpected ways.

In the first, disabled people who are already forced to pay care charges to their local council have seen these charges increase after migrating from employment and support allowance (ESA) onto universal credit, in some cases by more than £50 a week.

The council often only becomes aware the claimant has moved onto universal credit months after the migration, which leaves the disabled person with large arrears of care charges to pay.

DPAC believes these increased charges could be because certain disability-related premiums awarded under ESA – and previously disregarded by councils when calculating care charges – no longer apply under the universal credit system.

A second group of disabled people – apparently some of those who do not receive council-funded social care – are receiving a lower discount under their local council tax reduction scheme after migrating onto universal credit.

DPAC says universal credit payments seem to be treated differently than legacy benefits and that some disabled people are now paying 40 per cent of their council tax bills when previously they would pay nothing, with some now paying as much as £200 a month more.

This week, DWP refused to say if it was aware of these two concerns, if it was concerned, and whether it would take any action.

It also declined to provide an update on how many ESA claimants are still waiting to be migrated onto universal credit.

But it said in a briefing note that councils are responsible for assessing how much a person can be charged for care, while the Care Act 2014 requires that care charges are affordable, clear and transparent.

And it said that local authorities are responsible for designing council tax reduction schemes to support low-income households, and that councils have discretion to apply different rules for treating benefits such as universal credit relative to previous legacy benefits.

DPAC also pointed this week to the impact of rent increases on disabled people who have moved onto universal credit.

DWP had previously warned about this impact.

When rent increases, the housing element of universal credit also increases, but the total universal credit a migrated claimant is paid can stay the same, which means they are left with less to live on.

This is because the transitional protection paid to many of those moved onto universal credit by DWP through the “managed migration” process – which ensures a claimant is initially no worse off when they move across to the new benefit – is eaten away over time by inflation and often by other changes in circumstances.

DWP said that transitional protection was designed to be temporary, gradually reducing over time, so all universal credit claimants in similar situations are treated equally, regardless of whether they moved from old benefits or applied as a new claimant.

It confirmed that the transitional element decreases as other universal credit elements increase.

A DWP spokesperson said in a statement: “We support millions of people through universal credit every year – including those who have moved from ESA – and it’s a top priority for us to ensure that people receive the help they are entitled to.”

Linda Burnip, a DPAC co-founder, said: “While transitional protection in universal credit is designed for people to get poorer slowly year by year as the top-up amount reduces when the basic universal credit rates increase, there seems to also be no tie-in between incomes remaining the same and actions by local authorities with regard to the loss of council tax reduction and social care charging.

“We have been told by numerous people that in some areas care charges have increased from around £46 a week to over £100 a week [and that some] people have lost all or most of their council tax reduction with people paying as much as £208 a month for council tax when before migration to universal credit they paid nothing.

“Rent increases too are having to be absorbed by disabled people from a limited pot of money which they’re paid, leaving less for them to spend on ever-increasing living costs such as food and fuel.

“These issues are obviously causing great anxiety as, although having been told they would be no worse off on universal credit, many people are now paying out significant amounts of money they didn’t have to pay before migration.”

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