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.
Letters have been sent by the DWP to those receiving Tax Credits, Housing Benefit, Income Support, Jobseeker’s Allowance and Income-Related Employment and Support Allowance, instructing them to take necessary action. 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.
Those who receive these letters must apply for Universal Credit instead. Affected individuals have three months from the date on their migration notice to apply for Universal Credit to continue receiving benefits.
The DWP emphasises that people do not need to act until they 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 continuation of their benefits. The Low Incomes Tax Reform Group has cautioned: “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.
With Tax Credits set to terminate on April 5 this year, the DWP has made it clear: “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 has offered guidance for those receiving the letter, advising: “You should claim Universal Credit by the deadline on the letter.”
They further explain the implications: “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 add that this safeguard is designed to compensate for any shortfall: “This means that if you’d get less on Universal Credit than your old benefits, you’ll get an extra amount to makeup the difference. The DWP will reduce the extra amount over time – so you’ll eventually just get what you normally would on Universal Credit.”
Sir Stephen Timms, the minister for social security and disability, has urged households to waste no time in transitioning to Universal Credit. He emphasised: “As we start the new year, families across the country are thinking about what’s next.”
Further stressing the urgency, he added: “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) had plans to notify all recipients of Tax Credits, Income Support, income-based JSA, and Housing Benefit—totalling about 440,000 people—by September 2024.
Those on ESA should anticipate their notification by December 2025, with approximately 800,000 claimants having begun receiving these notices since September of the previous year. All legacy benefits are scheduled to be fully phased out by March 2026.