Benefit to be axed two years early as Universal Credit changes confirmed in Budget

Now, instead of receiving income-related ESA, the DWP has encouraged households to change over to Universal Credit.

ESA provides those unable to work - such as those with chronic illnesses or disabilities - financial support for living costs, as well as extra support to return to the workforce if the claimant has the capacity to do so.

Before the change, all ESA claimants were meant to change to receive Universal Credit instead by the end of 2028.

However, after the Chancellor's Budget, it is now known that the Government will end all income-related ESA claims by the end of the financial year in 2026.

The Budget documents read: "This move will bring more people into a modern benefit regime, continuing to ensure they are supported to look for and move into work.

"Around half of ESA claimants will receive more financial support on UC, while others will receive transitional protection to ensure nobody is worse off at the point at which they move over to UC."

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Consequently, households will be unable to renew income-related ESA claims from 2026.

If individuals fail to transfer to Universal Credit, they will stop receiving their benefits altogether.

Since 2022, the DWP has sent out almost 1.14 million migration notices. which lay out instructions for recipients on how to change to Universal Credit, but figures indicate that almost 300,000 claimants have already lost payments as they did not respond to notices between July 2022 and June 2024.

Now, approximately 800,000 households have received these "migration notices" to move from their income-related ESA to Universal Credit.

Recipients of legacy benefits will be sent a letter by post, after which the individual must take action within 3 months because the switchover is not automatic.

As it stands, around 623,310 people have successfully made claims for their Universal Credit, while 232,830 remain in the transitional stage.

Additionally, hundreds of thousands of those who receive tax credits, income support, housing benefit and income-based jobseeker's allowance must change before April next year.

Financial advisers have warned households to fully consider the consequences of transitioning to Universal Credit before they are sent a migration notice since there is no possibility of reverting once the switch has been made.