Your relationships and earnings could completely halt or cut down your benefits (Image: GETTY)
The migration to Universal Credit involves transitioning individuals from six legacy benefits, such as tax credits, onto the new system. However, the has now disclosed that could terminate this protection, and potentially even eliminate their entire Universal Credit earnings. Once fully transitioned to Universal Credit, your transitional protection could be at risk if:
- Your relationship status changes
- Your earnings and savings fluctuate
In the first scenario, this primarily looks at if a partner moves into or out of your household. This could significantly impact your eligibility for benefits in general, depending on their income and benefits.
The second set of circumstances is slightly more complex and could potentially terminate your benefits claim altogether. Essentially, if your earnings increase significantly, you could lose both, while if they decrease substantially, your transitional protection could be reduced.
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The clarified that if your earnings rise to the extent where your Universal Credit is cut to zero for four consecutive assessment periods, your transitional protection will cease. If your earnings then drop making you eligible again, you will only be able to reapply for Universal Credit and will not receive transitional protection.
If your earnings fall below your administrative earnings threshold for more than three consecutive assessment periods, your transitional protection will end. For individual claimants, this threshold is typically £892 per assessment period, while couples usually have a combined threshold of £1,437 per assessment period.
It is important to understand that transitional protection is only available to those making eligible claims for Universal Credit through the migration process.
For instance, if a person is entitled to £800 through tax credits but only qualifies for £600 in Universal Credit, their transitional protection will be worth £200 to maintain their income level in the new system.
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Another safeguard some Universal Credit migrants may qualify for is the transitional capital disregard. This means that any savings an applicant has over the £16,000 threshold, which would normally disqualify them from Universal Credit, are not considered in their claim.
However, if your savings and investments fall below £16,000 after receiving this protection, your disregard will cease. You will still be eligible for Universal Credit so it will not instantly affect your benefits, but you will then be subject to the £16,000 limit and exceeding it will impact your Universal Credit.
Other changes in circumstances that could reduce your transitional protection include having a child, deteriorating health conditions or alterations to government benefit rates. However, this typically will not affect your actual benefits income.
For instance, if an eligible person receives £600 Universal Credit entitlement and £200 transitional protection, totalling £800, and they have a second child this will boost their Universal Credit claim by £50. Their transitional protection will decrease correspondingly by £50 so overall they still receive £800 from benefits but the split is now £650 from Universal Credit and £150 from transitional protection.
More information can be found on