If you receive tax credits you must take urgent action now if you are to continue getting financial assistance – and you have just weeks left do it
Huge changes to the welfare system are being brought in and if you don’t act swiftly you may lose your benefits altogether.
Anyone in receipt of tax credits have been issued an urgent warning to act now or lose their financial support. The Department for Work and Pensions (DWP) has stated that no more payments will be made under the old system as it brings about the changes to benefits as part of a major overhaul.
Unfortunately those currently claiming tax credits, which also includes Housing Benefit, Income Support, Jobseeker’s Allowance and Income-Related Employment and Support Allowance won’t automatically be moved onto Universal Credit or Pension Credit, which are replacing all six of the axed benefits. Your payments will completely stop in April if you don’t apply for the new benefit yourself.
Those receiving tax credits should by now have had a letter from the DWP with instructions of what you can apply for and how to do it. According to official figures, 594,000 families claiming tax credits in April 2024 will see their benefits halted from April 2025 if no action is taken.
You don’t have to do anything until or if you receive your migration letter from the DWP but once you do, you have three months from the date on it to take action. The government website states: “To continue receiving financial support you must claim Universal Credit by the deadline date given in your letter. If you cannot claim Universal Credit by the deadline date, you should contact the Universal Credit Migration Notice Helpline as soon as possible. You may be able to get more time to make a claim if you have a good reason. You must request this before your deadline date.”
Citizen’s Advice has a detailed help page on who is entitled to claim Universal Credit and what to do if you are in receipt of a migration letter. It also provides information on how you may get extra money as the changes take place. “Your old benefits will stop after the deadline,” it warns. “If you claim Universal Credit before the deadline, the DWP might pay you extra to stop you being worse off. This is called ‘transitional protection’. This means that if you’d get less on Universal Credit than your old benefits, you’ll get an extra amount to make up the difference. The DWP will reduce the extra amount over time – so you’ll eventually just get what you normally would on Universal Credit.”
The transitional protection also means some people may be able to get Universal Credit when they wouldn’t usually be entitled to it. This includes if you are:
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are a full-time student who wouldn’t usually get Universal Credit, you can usually get it until the end of your course
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get tax credits and have over £16,000 in savings or investments, you can get Universal Credit for up to a year – this is a type of transitional protection called a ‘transitional capital disregard’
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have reached State Pension age and get a migration notice, you can claim Universal Credit
A very small number of people will not be eligible for Universal Credit or Pension Credit. These individuals will be able to remain on and receive tax credits until April 5, 2025, unless a change in their circumstances ends tax credits sooner. After this date, tax credits will end, and no further tax credits payments will be made.