The Department for Work and Pensions has issued a warning to individuals on tax credits, stating that they have just two months before their payments will cease. In total, six benefits are being phased out and replaced by Universal Credit.
Recipients of Tax Credits, Housing Benefit, Income Support, Jobseeker’s Allowance and Income-Related Employment and Support Allowance have received letters from the DWP instructing them to take action. Those on tax credits – 594,000 families as per official figures from April 2024 – will see their benefits halted from April 2025 if they fail to act.
Individuals who receive these letters must apply for Universal Credit instead. Those affected have a three-month window from the date on their migration notice to apply for Universal Credit in order to continue receiving benefits.
The DWP emphasises that no action is required until recipients receive their migration notice letter from the Department from Work and Pensions.
The Department for Work and Pensions (DWP) is calling on Tax Credit recipients to act swiftly in response to their Universal Credit migration notices to ensure the continuity of their benefits. The Low Incomes Tax Reform Group has issued a cautionary note: “Universal credit is gradually replacing working tax credit and child tax credit as well as some other means-tested benefits. If you have been claiming tax credits and start to claim universal credit in the same tax year, your tax credit award will stop. Your tax credits will also stop if you have been sent a migration notice asking you to claim universal credit by a deadline date and you do not do so.”, reports Cambridgeshire Live.
They further highlighted that Tax Credits are set to come to an end on April 5 this year, with the DWP emphasising: “Tax credits end on 5 April 2025. No more payments will be made after that. You’ll be sent a letter if you are eligible for Universal Credit or Pension Credit instead.”
Citizens Advice offers crucial advice on the next steps for those who receive the notification letter: “You should claim Universal Credit by the deadline on the letter.”
They add a vital reminder: “Your old benefits will stop after the deadline. 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’.”
They further elaborate that this provision is designed to balance the scale for those who might receive less under Universal Credit than they did with their previous benefits by affording them an additional amount to offset the difference, although notifying recipients that this ‘top-up’ will gradually reduce over time until it aligns with the standard Universal Credit payment.
Sir Stephen Timms, the minister for social security and disability, has issued a stark reminder to households that time is of the essence when it comes to switching over to Universal Credit. He stated: “As we start the new year, families across the country are thinking about what’s next.”
He urged prompt action, saying, “With this in mind, I encourage everyone who has received a migration notice to act as quickly as possible and move onto Universal Credit. We know how quickly time can pass when you’re busy – and with just three months to go until Tax Credits close on the 5th of April – now is the time to respond to your Universal Credit migration notice to continue receiving benefits.”
The Department for Work and Pensions (DWP) has set targets to send out migration notices to all households currently claiming Tax Credits, Income Support, income-based JSA, and Housing Benefit by September 2024, which affects approximately 440,000 people.
Those on ESA should expect to receive their notification by December 2025. The DWP began the process of sending these notices in September last year, reaching out to an estimated 800,000 claimants.
The government plans to phase out all legacy benefits completely by the end of March 2026.