DWP Scraps Income-Related ESA as Thousands Moved to Universal Credit

The Department for Work and Pensions (DWP) is phasing out a benefit currently claimed by thousands of people, as income-related Employment and Support Allowance (ESA) is replaced by Universal Credit (UC). New claims for income-related ESA are no longer allowed.

The managed migration of around 800,000 people who claim income-related ESA—either on its own or alongside Housing Benefit—has been brought forward. The process had previously been scheduled for 2028–2029 but will now be completed earlier.

The DWP began issuing migration notices to affected claimants in September 2024 and aims to contact everyone in this group by December 2025. Under current plans, all remaining legacy benefits will be closed and the full rollout of Universal Credit completed by March 2026.

Managed migration involves the DWP sending claimants a formal notice informing them that their existing benefit will end and that they must apply for Universal Credit to continue receiving financial support. In most cases, claimants are given at least three months from the date of the notice to submit a UC claim, with extensions available where there is a valid reason.

As of August 2024, around 650,000 people were receiving income-related ESA, down by 75,000 compared with August 2023. Those remaining either receive both contribution-based and income-related ESA or receive National Insurance credits only.

Current recipients of income-related ESA can continue receiving it until they receive a managed migration letter. Payments will stop three months after the date on that letter, meaning claimants must apply for Universal Credit before the deadline to avoid a break in payments and to qualify for transitional protection.

Claimants who switch to Universal Credit before receiving a migration notice will not be eligible for transitional financial protection. Once a UC claim is made, any legacy benefits—such as Housing Benefit—will end.

The DWP has confirmed that the managed migration process is in its final phase and will conclude by 31 March 2026. After this date, income-related ESA will no longer exist.

ESA claimants can only continue receiving the benefit while working if their job qualifies as “permitted work.”