DWP to axe benefit claimed by 1.6 million people - with change happening two years early

The Department for Work and Pensions (DWP) has announced plans to scrap a benefit two years ahead of schedule. The DWP is speeding up the process of phasing out income-related employment and support allowance (ESA), encouraging households to switch to Universal Credit instead.

Originally, all ESA claimants were expected to transition to Universal Credit by the end of 2028. Universal Credit was designed to replace legacy benefits, including income-related ESA.

However, in her Autumn Statement, Labour Party Chancellor Rachel Reeves confirmed that all income-related ESA claims will now cease by April 2026. As of August 2023, there were 1.6 million people on Employment and Support Allowance (ESA), a decrease of 89,000 over the previous year.

The Budget documents stated: "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."

This means that from 2026, households will no longer be able to renew their income-related ESA claims. They must switch to Universal Credit, or their payments will stop, reports Birmingham Live.

The push to transfer all two million claimants on legacy benefits to Universal Credit by the end of March 2025 is happening through a process known as managed migration.

Citizens Advice has issued a warning, detailing: "The Department for Work and Pensions are stopping some people's benefits and telling them to claim Universal Credit instead. If you get a letter telling you to claim Universal Credit by a certain deadline, this is a 'migration notice'. You should claim Universal Credit by the deadline in the migration notice. Your old benefits will stop after the deadline."

The advisory service further cautioned that "You might miss out on some money if you apply after the deadline."