ESA to Universal Credit: what happens when income-related ESA ends

Two different benefits share the name. Income-related Employment and Support Allowance is means-tested, and it is one of the six benefits Universal Credit replaces. Contribution-based ESA, now called New Style ESA, is not means-tested and is not being replaced: it is paid on your National Insurance record, savings and a partner's earnings do not touch it, and it continues after you move. Plenty of people hold both, with the income-related part topping up the contributory part. If that is you, only the topping-up half ends. New Style ESA carries on being paid fortnightly, and Universal Credit then counts it as income and reduces your award by the same amount, so the two never stack into a larger total. Check your award letters if you are unsure which you hold: they name the benefit, and only one of them is going anywhere.

The part people dread is a fresh Work Capability Assessment, and in most cases there is not one. DWP will not normally reassess you if three things are true: you moved from ESA to Universal Credit with no break, you had already completed a Work Capability Assessment, and you were in the support group or the work-related activity group at the point you claimed. Meet all three and you do not need to send fit notes either. Two things still bring a fresh look: an assessment already due for review, and a change in your condition. If you were still in the ESA assessment phase with no decision, none of this applies, so keep sending fit notes on Universal Credit until a decision is made.

The support group maps onto the health element, formally limited capability for work and work-related activity. It is paid at £429.80 a month at the higher rate and £217.26 at the lower, and which one applies turns on when the condition was reported rather than on how severe it is. It also removes every work-related requirement from your claimant commitment, brings a work allowance so that the first £427.00 you earn is ignored where your award includes housing, and lifts the benefit cap. The work-related activity group has no equivalent, because the limited capability for work element is closed to new awards and nothing replaces it. Where that leaves you short, the transitional element is what covers it, provided you claimed in response to a migration notice and did so by the deadline.

If your Universal Credit award works out lower than the ESA award it replaces, a transitional element makes up the difference so that nothing changes on the day you move. It is added automatically when you claim in response to a migration notice, and only if you claim by the deadline. It is never added to a claim you made voluntarily, and never to one made after the deadline has passed. It then erodes: each time another element rises, whether through an uprating, a new child or higher rent, the transitional element falls by the same amount, so your total stays flat rather than growing. Childcare is the one exception. A relationship change, or anything that ends the claim outright, ends the protection completely.

The rhythm of payment changes more than the arithmetic does. ESA is paid fortnightly; Universal Credit is paid monthly in arrears, so the first payment lands about five weeks after you claim, and an advance is available to bridge it. Your ESA keeps being paid for two weeks after you claim, you do not repay those two weeks, and they do not reduce your Universal Credit. Housing Benefit that went straight to your landlord normally becomes your job to pay. Earnings above your work allowance reduce the award at 55p in the pound rather than being tested against fixed hours. Plan the budget early: an award built on a standard allowance of £424.90 a month, arriving once on the same date, needs different handling from a fortnightly one.