How will Universal Credit affect my ESA?

Universal Credit is replacing means-tested benefits, including income-related Employment & Support Allowance (ESA). The benefits Universal Credit replaces are known as ‘legacy benefits’. The DWP is gradually moving people on legacy benefits - including ESA - to Universal Credit. This process is called ‘managed migration.’

What can I claim?

If you are unable to work because of a mental health condition or disability, you may be able to claim Universal Credit and New Style ESA. We explain what this means for you, how Universal Credit will affect your ESA and the differences between the two benefits.

If you can't work because of sickness or a physical or mental health disability and receive ESA, how Universal Credit will affect your ESA will depend on several factors:

• Your current ESA claim.
• Any other benefits you receive.
• Your National Insurance Contribution (NIC) record.
• Your household income and savings.

Universal Credit and Old Style ESA

Old Style ESA is ESA awarded and paid outside of the Universal Credit system. Old style ESA includes:

1. Income-related ESA

If you claim Universal Credit (UC), you no longer qualify for income-related ESA. If you are on income-related ESA and make a new claim, you will have to apply for UC instead. Once you claim UC, you cannot go back to income-related ESA. You might be better staying on Income-related ESA depending on your circumstances. Try to seek advice from a welfare and benefits advisor before making a new benefit claim.

2. Contribution-based ESA – replaced by New Style ESA

If you are entitled to Universal Credit (UC) for at least part of a week, you can be credited with National Insurance Contributions (NIC) for that week. This means you may still be entitled to contribution-based ESA (Cb-ESA). Cb-ESA has been replaced by New Style ESA. New Style ESA is also contribution-based but if you also need means-tested support, that must now be under Universal Credit.

Universal Credit and New Style ESA

You may be able to claim Universal Credit (UC) and New Style ESA at the same time. Whether you get one or both, depends on your situation. If you're currently claiming New Style ESA and need extra support with housing or family costs, you may be able to claim UC alongside New Style ESA.

When can you claim Universal Credit and New Style ESA?

You can continue to claim New Style ESA if you have paid enough National Insurance Contributions (NIC) but don't qualify for Universal Credit. This could be for the following reasons:

• Your partner's earnings are too high and/or your combined savings are over £16,000.
• You don't need to claim any elements of Universal Credit.

When will I move from old style ESA to Universal Credit?

The date you move from income-related or contribution-based ESA to Universal Credit will be affected by:

1. A change in your circumstances or
2. When the Department for Work & Pensions (DWP) decide to move you over to Universal Credit using 'managed migration'

Change in Circumstances

You will typically need to switch from old-style ESA to Universal Credit if your circumstances have changed significantly. This may include the following:

• Starting a new job.
• Failing a Work Capability Assessment (WCA).
• Starting to rent a property, especially in a new local authority.

If this happens, all the legacy benefits you get, including old-style ESA, will stop and be replaced by Universal Credit. Your circumstances are assessed every month under UC. You must report any change in circumstance when it happens. If you don’t report a change in circumstance, your benefit can be taken away from you. Learn what changes in circumstance can affect Universal Credit here.

If you have been moved over to Universal Credit from a legacy benefit - known as ‘natural migration’ - the amount of UC you get could be more or less than the benefits you get now. If you are asked or informed about a switch, seek advice from a Welfare & Benefits advisor.

No change in circumstances

If your circumstances haven't changed the Department for Work and Pensions (DWP) will contact you about moving to Universal Credit when they are ready - this is called ‘managed migration’.

If you haven't had a change in circumstances, you will be able to claim Transitional Protection. Universal Credit transitional protection is a top-up award that ensures you are not financially worse off when you claim Universal Credit.

Claiming Universal Credit instead of ESA

If you have to claim Universal Credit instead of ESA, you will need to apply for the limited capability for work-related activity (LCWRA) element of Universal Credit.

To claim the LCWRA element of Universal Credit, you will need to have a fit note from your doctor - read our guide on applying for Universal Credit.

You will attend a Work Capability Assessment (WCA) which will assess how your illness, physical or mental health disability affects your ability to work. After the WCA you will be put into one of the following groups:

• You're fit to work.
• You have limited capability for work (LCW - you are unfit to work now but can prepare to return to work in the future).
• You have limited capability for work and work-related activity (LCWRA - you are declared unable to work and won't need to look or prepare for work).

Will I get less money on Universal Credit compared to ESA?

The Universal Credit monthly payment is made up of a basic standard allowance and extra amounts – sometimes known as ‘elements’ – that may apply to you depending on your circumstances. Depending on what you are entitled to, your Universal Credit payment might be more or less than the amount you're getting for your current benefits.

The limited capability for work and work-related activity (LCWRA) element replaces income-related ESA. For 2022/23, the LCWRA rate of Universal Credit is £354.28.

Try to speak with a Welfare and Benefits advisor before you are transferred to Universal Credit. They may be able to help with your claim and ensure you are not worse off under UC.

What if my mental health affects my ability to make a Universal Credit claim?

If you're struggling to make a Universal Credit (UC) claim because of a mental health condition, you may be able to get an extension when applying. You will need to tell the DWP when they contact you about moving to UC.

Which legacy benefits are being replaced by Universal Credit?

• Income Support (IS)
• Income-related Employment & Support Allowance (Ir-ESA)
• Income-based Jobseekers Allowance (Ib-JSA)
• Housing Benefit (HB)
• Child Tax Credit (CTC)
• Working Tax Credit (WTC)

Universal Credit (UC) rolls up these legacy benefits and adds different elements to your UC payment, e.g. a UC element for support with housing costs.

We understand that navigating the UC system is complex and can affect your mental health. If you are worried about how UC might affect any legacy benefits you receive, please seek help from a Welfare and Benefits Advisor.