Universal Credit is a part of the payroll landscape as entitlement or non-entitlement is regulated by the information sent to HMRC on the Full Payment Submission (FPS). Therefore, any legislation that brings more benefits into scope is important to be aware of.
The Welfare Reform Act 2012 (Commencement No. 35) (Abolition of Benefits) Order 2025 will abolish the following benefits and bring them under the Universal Credit banner as follows:
1. The contributory Old Style Employment and Support Allowance (ESA) will migrate to the UC from 01 December 2025;
2. The New Style Employment and Support Allowance (ESA) will migrate to the UC from 01 December 2025;
3. The Old income-based Jobseeker’s Allowance (JSA) will migrate to the UC from 01 April 2026;
4. The New income-based Jobseeker’s Allowance (JSA) will migrate to the UC from 01 April 2026;
5. Income Support will migrate to the UC from 01 April 2026;
6. Housing Benefit will migrate to the UC from 14th November 2025
For Bookkeepers
Note that The Department for Work and Pensions (DWP) are responsible for the payment of benefits and are gradually ceasing the above payments and migrating them to Universal Credit (UC).
DWP will send claimants a ‘migration notice’ letter advising that the benefits are ceasing and a claim must be made for UC. The benefits will cease to be paid after the deadline and the claim for UC must be made by this time.
For payroll professionals, we will not be aware if an employee is receiving one of the above benefits, nor is it important. What is important, however, is to realise that more people moving to UC giving greater emphasis to the accuracy of the FPS which is used to regulate entitlement. This 2025 legislation is hugely significant, both personally and professionally.
