Move to UC Get the timing right to protect benefit uprating in April

Hello everyone, Advice NI has just put out this information today to raise awareness amongst benefit claimants who are getting their 'Move to UC' Migration Notices. It would be such a shame if claimants needlessly suffered a benefits freeze, just because they didn’t realise they had the option to delay their move until on or after 8th April ... alternatively, for those whose Migration Notice deadline falls before then, more difficult but not impossible to do something to help. Hope helpful, Kevin ... Here's the link ... Advice NI encourages Tax Credit claimants to seek independent advice before making a claim for Universal Credit in order to maximise entitlement to benefit uprating from April | Advice NI

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  • Newcad
    Newcad Posts: 795
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    edited 12 February at 11:43AM
    I've actually just made a post about that very subject of erosion of the TE due to the anual uprating.
    My thinking is that although yes a TE will be eroded by the uprating as noted in that Advice NU article; in general that erosion doesn't actually make any difference to the TE that you will be paid after the April uprating anyway.
    That's because the increased UC figures would be used when calculating the TE so you'd get a lower TE after April 8th anyway.

    See here for my thoughts (and a simple example) of why it shouldn't make any difference to your TE after April whether you claim before April 8th or not.:
    https://forums.moneysavingexpert.com/discussion/6505335/uc-transitional-element-and-annual-uc-uprating-some-thoughts#latest


  • Many thanks Newcad,

    Ultimately it is all about whether the claimant receives a 6.7% increase in income associated with benefit uprating.

    If the claimant moves before uprating and gets Transitional Protection, when uprating happens it is eroded / offset / absorbed by the TP amount.

    If the claimant waits until they 'bank' the 6.7% uprating, they may still need to avail of Transitional Protection, but their income will have increased by the full benefit uprating amount. 

    Definitely can make a difference, especially as we know in NI, 87% of cases moving from tax credits to UC needed to avail of Transitional Protection,

    Hope helpful, Kevin
  • And importantly, HMRC tell us "tax credit uprating is always effective from the 6 April"
  • Newcad
    Newcad Posts: 795
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    edited 12 February at 12:11PM
    Kevin_2 said:
    Many thanks Newcad,

    Ultimately it is all about whether the claimant receives a 6.7% increase in income associated with benefit uprating.

    If the claimant moves before uprating and gets Transitional Protection, when uprating happens it is eroded / offset / absorbed by the TP amount.

    If the claimant waits until they 'bank' the 6.7% uprating, they may still need to avail of Transitional Protection, but their income will have increased by the full benefit uprating amount. 

    Definitely can make a difference, especially as we know in NI, 87% of cases moving from tax credits to UC needed to avail of Transitional Protection,

    Hope helpful, Kevin

    See the example in my post linked above, there is no difference because the TE after being eroded by 6.7% is the same amount of TE you would get if it were calculated after the UC had already risen by 6.7%
    The only real difference is one of perception.
    If you have migrated before the UC uprating then you will 'see' the erosion of TE.
    If you migrate after the uprating then you won't 'see' that. (because it will already be included in the TE calculation).
    But in the end the TE that is payable after the uprating is the same in both cases.
    PS The Tax Credit renewal letters don't get sent out until after April.
    Those who get a 'Migrate to UC' letter before April and so have to decide whether to migrate before or after April 8th will not be getting a Tax Credit renewal letter.



  • Many thanks, please remember that legacy benefits get up-rated as well ... if you claim beforehand Transitional Protection gets eroded and you end up worse off.

    And please remember we are talking about real people ... not 'edge' cases. If this is a case of 'perception' then there should be no 'edge' cases?, Kevin 
  • Newcad
    Newcad Posts: 795
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    edited 12 February at 1:58PM
    As you will see in my linked post, whilst I'm not discounting rises in HB and other legacy benefits I am simplifying the explanation because if the legacy benefit is included in migration then there will be an equivalent percentage rise in UC for the same thing.
    eg. The increases in HB and UC-HE are exactly the same. So the TE calculation for those increases cancels out.
    Apologies for the language used, that post was written more with advisors in mind.
    (I'd been on the professional advisors forum and was in jargon mode. An 'edge' case is shorthand for out of the ordinary or  'unusual curcumstances', I've now changed it).
    However this 'loss' due to erosion of the TE is simply a perception.
    I myself did used to think of it as being a loss, and I did used to advise waiting until after the uprating if you could.
    However because it is now topical I took a deeper look at it, and realised that it is only on first look that there appears to be a loss.
    Yes the TE does reduce by erosion, and that looks like a loss.
    But the UC payable doesn't change so there is no actual loss.
    Plus if the TE is calculated after the uprating it will be set at the same figure as the now 'eroded' TE.
    Whether you wait to migrate or not, your UC (your TE) will be the same after the April uprating.
    I do understand that it's difficult to see that, all we see at first is that the TE is eroded/reduced, but that isn't the full story and you have to look deeper to see that it seems to have no effect at all on when you should claim.
    In the end if you do get a migration notice and do want to wait until after the uprating before migrating then do so, it's your choice.
    And on reflection I'll still say wait if you can.

    However, in regards to any TE and erosion thereof it shouldn't make any difference to how much UC you will get after April. (Except in a very few unusual circumstances).
  • To repeat, Advice NI has just put out this information today to raise awareness amongst benefit claimants who are getting their 'Move to UC' Migration Notices. It would be such a shame if claimants needlessly suffered a benefits freeze, just because they didn’t realise they had the option to delay their move until on or after 8th April ... alternatively, for those whose Migration Notice deadline falls before then, more difficult but not impossible to do something to help. Hope helpful, Kevin ... Here's the link ... Advice NI encourages Tax Credit claimants to seek independent advice before making a claim for Universal Credit in order to maximise entitlement to benefit uprating from April | Advice NI
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