Starting this weekend, the Department for Work and Pensions (DWP) will cease the distribution of Tax Credit payments as it moves claimants over to Universal Credit or Pension Credit.
While the majority of claimants have already completed this transition, a small group of individuals who are ineligible for Universal Credit or Pension Credit will experience their Tax Credit payments ending on April 5, 2025.
Transitioning to Universal Credit or Pension Credit
The government’s shift to Universal Credit or Pension Credit aims to simplify the benefits system by replacing older legacy benefits, including Tax Credits.
As stated on the Gov.uk website, no payments will be made after April 5, 2025, and recipients who qualify for Universal Credit or Pension Credit will receive a notification via mail.
Migration Notices and Application Requirement
The DWP has begun sending out migration notices, informing claimants that they must apply for Universal Credit before the date specified in the letter they receive.
It’s essential to submit your claim on time, as this is not an automatic process. Failure to apply could result in a loss of benefits.
Benefits Being Replaced by Universal Credit
Several benefits are being phased out and replaced by Universal Credit or Pension Credit for eligible individuals. These include:
| Benefit | Replacement |
|---|---|
| Child Tax Credit | Universal Credit |
| Working Tax Credit | Universal Credit |
| Housing Benefit | Universal Credit |
| Income Support | Universal Credit |
| Income-based Jobseeker’s Allowance (JSA) | Universal Credit |
| Income-related Employment and Support Allowance (ESA) | Universal Credit |
What Happens if Your Universal Credit Payment is Lower?
For many, the amount they receive under Universal Credit will be at least the same as their previous benefits.
However, if the amount of Universal Credit is lower than what they were previously entitled to, they may qualify for transitional protection. This extra financial support ensures that claimants are not left worse off during the transition.
The transition from Tax Credits to Universal Credit or Pension Credit is a significant change, and it’s crucial for claimants to take action by applying on time to avoid losing out on benefits.
Those who do not qualify for Universal Credit may see their payments end on April 5, 2025. For those eligible, transitional protection may be available to ensure they do not face a reduction in benefits during the switch.
FAQs
What happens if I don’t apply for Universal Credit on time?
If you miss the application deadline, you may lose your eligibility for Universal Credit or Pension Credit, and your Tax Credit payments will stop.
Will my Universal Credit amount be the same as my previous benefits?
Most people will receive at least the same amount in Universal Credit as they did in Tax Credits. If your entitlement is less, transitional protection may apply.
Can I still receive Tax Credits after April 5, 2025?
No, after April 5, 2025, Tax Credits will be completely phased out and will no longer be paid.
How will I know if I qualify for Universal Credit or Pension Credit?
You will receive a letter from the DWP if you are eligible for either Universal Credit or Pension Credit.