The Impact of Annual Uprating on Managed Migration and the Transitional Element

This article gives some tactical advice for clients with a migration notice and how they are impacted by annual uprating of benefits. It should be read alongside our our Adviser Online article “A guide to managed migration”, which explains the terms used in this article

Annual uprating will be higher than usual in April 2023, due to recent inflation rates¹. This will significantly impact those who have moved to Universal Credit under managed migration and have a transitional element (TE), as the increase to the standard amount and elements of their award due to uprating will erode their TE, in some cases by a significant amount.

With that in mind, any legacy benefit claimant who:

• Receives a migration notice up to 3 months before their legacy benefit gets uprated, and
• Is likely to be entitled to a TE on the basis that their UC will be less than their legacy benefit

may wish to delay their claim until after uprating has been applied to both their legacy benefit and UC awards. This includes some claimants who may only be entitled to a TE after the uprating of their legacy benefits and UC, as the difference between the benefits may change.

Annual uprating will take effect from:

• For UC, the first assessment period to start on or after 10 April;
• For Tax Credits (TC), 6 April;
• For Housing Benefit (HB) paid in reference to weekly rent, 3 April;
• For HB paid in reference to monthly rent, 1 April;
• For income Support (IS), income-related Employment and Support Allowance (ESA) and income-based Jobseeker’s Allowance (JSA), the first benefit week to start on or after 10 April. For claimants with a benefit week that starts on Tuesday this will be 11 April, for a Wednesday this will be 12 April and so on.

For uprating to be applied to their legacy benefits before they migrate to UC, the claimant needs to wait one day after uprating has been applied before they claim UC.

Example — Lisa

Lisa claims income-related ESA and her benefit week starts on a Thursday. She receives a migration notice on 15 March, stating that Lisa needs to claim UC by 16 June. She is better off on ESA than she would be on UC, so will be entitled to a TE in her UC.

The new benefit rates would take effect in Lisa’s ESA from the first Thursday after 10 April, which is 13 April. Lisa would need to wait until 14 April to claim UC in order to have the uprating applied before she moves to UC.

This would also mean the new benefit rates for UC would take effect in Lisa’s first assessment period, as this starts after 10 April. As a result Lisa’s TE will also not be subject to any erosion due to uprating.

If a claimant is in receipt of multiple legacy benefits, they should generally wait until uprating has been applied to all of them before moving to UC in order to get more in their TE.

Full; article – https://medium.com/adviser/the-impact-of-annual-uprating-on-managed-migration-and-the-transitional-element-86b408e5e0ca