Transitional protection: how cuts in the benefits system are hidden

Z2K’s Jamie Thunder sets out how Transitional Protection’ covers up the reality of changes to benefits

The publication earlier this year of the Health and Disability White Paper has understandably caused a lot of worry among people who are seriously ill or disabled, and people and services that provide advice and support. We at Z2K have serious concerns about this, as our briefing sets out in detail.

In Parliament, the Minister for Disabled People, Health and Work was at pains to point out that for people currently receiving ESA or the health-related elements of Universal Credit, DWP would introduce ‘Transitional Protection’, meaning they will be no worse off on the day they move to the new system. He said: “It is also important to set out for the House that there will be transitional cash protection in place. No one who currently has limited capability for work or work-related activity will lose out as they move to the new system.”

This statement was true, but didn’t give the full picture.

Transitional Protection already exists within the benefits system: it’s also available if you claim Universal Credit while you are receiving the Severe Disability Premium (SDP), and if you move to Universal Credit under ‘managed migration’.

This matters, because for some groups of people, Universal Credit is less generous than the benefits it replaces. DWP itself estimates that about a third of people due to move to Universal Credit under managed migration will be worse off – in large part because of the loss of various elements relating to disability. Transitional Protection probably makes you think of protection. The key word, however, is ‘transitional’: it just means you see a gradual reduction in your benefits compared to what you have had under the old system.

As an example (using completely made-up figures), imagine you receive £1,200 a month in legacy benefits, but would only be eligible for £1,000 of Universal Credit. That means you have £200 in Transitional Protection when you first claim: you’re not worse off at that point.

From that point on, however, any increases to your Universal Credit up to £200, for any reason, won’t increase your total amount of Universal Credit. Instead, they’ll eat into that Transitional Protection. Only once that protection reaches zero, will your Universal Credit go up again should it further increase for any reason.

If nothing much changes for you, the loss of Transitional Protection will be fairly slow – it’ll probably only be if benefits are increased each April, and it’ll take a while for that to reach the full £200. But you’ll still be a bit worse off each year than you would have been if you’d been allowed to stay on the old benefits, and eventually you’ll be the full £200 (again, a made-up figure!) a month worse off.

There are also plenty of reasons why your Universal Credit might suddenly increase, wiping out your Transitional Protection altogether: if you have a child; if you move in with a partner; if your rent increases or you move from Temporary Accommodation (paid by Housing Benefit, not Universal Credit) into a regular tenancy; if you start to get the Limited Capability for Work-Related Activity element. All of these can add hundreds of pounds a month to your Universal Credit – which could easily be more than the ‘protection’ you had.

And people making brand new claims to Universal Credit can’t get Transitional Protection – so could just be worse off than they would have been if the previous system had still been in place.

Transitional Protection for current claimants is better than no protection – but it also hides the impact. Ministers should be clear: whatever they call it, they are choosing to introduce a system that will make many people on low incomes worse off. Doing so more slowly doesn’t change that.

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