Another three months of ‘Move to Universal Credit’ statistics were released yesterday. Overall they show a similar picture to the last set of statistics: the success rate for people moving on to Universal Credit (UC) from DWP benefits is much higher than for people moving from tax credits (1).

The end of tax credits is nearly nigh, with the last payments being made at the end of the tax year on April 5, so we are close to the final picture for this part of the managed migration process.

The latest statistics show that, with a few cases still outstanding, over 330,000 people claiming tax credits have failed to move on to UC. Given the various easements introduced to accommodate tax credit migrants, it is likely that the vast majority of these would have qualified for UC had they claimed. In terms of benefit take-up this is a massive own goal for the government, and the tax credits part of the Move to UC programme must surely be judged a failure.

Migration of people from legacy benefits on to UC appears to be going much better, though far from perfectly.

Below we look at the different groups of claimants to see how many failed to move on to UC (at entitledto we call this the ‘close rate’).

Tax credits and a DWP benefit (or Housing Benefit)=4.8%

The difference between different benefit combinations is shown by looking at people who were claiming tax credits and a DWP benefit (or Housing Benefit) at the same time. About 285,000 people were in this situation and all bar 14,000 successfully moved on to UC, in percentage terms the close rate is only 4.8%

Tax credits only = 34.4%

In contrast, the close rate for tax credit only cases was over a third - 34.4% of people formerly getting tax credits only failed to move on to UC.

DWP benefits (without any tax credits) = 9.9%

A more mixed picture emerges when looking at people moving on to UC from DWP benefits (without any tax credits). The best data relates to people who received a managed migration notice more than four months ago, who have therefore been all the way through the process, so numbers are growing rapidly as rollout accelerates.

Taken together, the overall close rate for this group is 9.9%. This is considerably better than tax credits but still very far from ideal, as it means that by the end of the managed migration process tens of thousands of people will miss out on benefits because they have failed to move on to UC.

However, this rate varies a lot between different benefits. For instance, where Housing Benefit is being claimed without any other benefits almost 1 in 5 (18%) failed to claim UC. In contrast, for people claiming Employment and Support Allowance (with and without other benefits) the current data shows 1.7% having their claims ended, which is more encouraging than the last set of statistics which showed a failure rate more than twice this level (2).

Possible reasons people fail to claim

What is unknown at the moment are the reasons why people fail to claim UC and how this correlates with statistics for the close rate. Plausible explanations for variations between different benefit combinations include: 

• The characteristics of different claimant groups. For instance, the relatively high failure rate of Housing Benefit only recipients might be because many of them receive relatively small amounts, as by definition their income or circumstances mean they don’t qualify for other benefits (excepting the issue of incomplete take-up). Or rather than their level of entitlement, it might be characteristics such as the proportion of the group who are self-employed or who have more frequent changes in circumstance.
• The level of support given to different claimant groups. For instance, tax credit only and Housing Benefit only claimants did not have access to DWP’s ‘enhanced support journey’, unlike Employment and Support Allowance claimants. Moreover, the team of ‘complex case coaches’ who end up resolving the most difficult cases have only recently started working in earnest.
• The way the final claim date is administered for different claimant groups. The statistics for Employment and Support Allowance with Child Tax Credit and Housing Benefit show the lowest failure rate of any claimant group at 1.5%. But perhaps as noticeable is the fact that 5.5% of this group are still ‘in progress’ and so not included in our close rate estimate. As the data relates to people who received a managed migration notice more than four months ago, i.e. before the end of August 2024, this means the three month deadline for claiming UC is being extended in a significant number of cases. 

Looking to the future

In another three months we’ll be able to tell more about how DWP are going to deal with their most vulnerable Employment and Support Allowance claimants. By definition, people moving to UC at this point in the rollout are long-term benefit claimants, and resistance to moving to UC may be stronger among this group than among other claimant groups, where changes of circumstance (and hence natural migration to UC) are more common.

Nevertheless, the clock is ticking for the 3,500 ‘in progress’ cases that involve Employment and Support Allowance and Child Tax Credit, which need to be resolved in the next six and a half weeks before the tax credit office closes on 5 April.

So far, barely 1,000 cases involving Employment and Support Allowance have ended unsuccessfully, and given the level of vulnerability prevalent in this group DWP are clearly going some distance to avoid closing legacy claims in such cases. Quite how far they will go, and how often, we will only find out with the next set of statistics.

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(1) Data taken from the 'MtUC Individuals 8 - Overall claim vs no claim by legacy benefit' table on Stat Explore 

(2) The previous set of statistics for people claiming Employment and Support Allowance (with and without other benefits) showed 4.8% having their claims ended. However, this percentage was based on a very low number of cases (712 people) so might be unreliable as a guide to whether the programme has improved.