Tax credits being replaced by Universal Credit

Tax credits are coming to an end, and most people will need to apply for Universal Credit instead.

Look out for a letter called a Universal Credit Migration Notice from the Department for Work and Pensions (DWP) explaining what you’ll need to do, and by when.

If you are claiming tax credits and are aged 65 or over, DWP will write to you to ask you to apply for Universal Credit or Pension Credit, depending on your circumstances.

You won’t be moved automatically, so it’s important to act quickly and follow the instructions in the letter, otherwise your benefits will stop.

To continue to receive financial support, you will need to claim Universal Credit by the deadline stated in your Migration Notice letter, even if you have just renewed your tax credits claim.

 

What is Universal Credit?

Universal Credit is a modern benefits system for people in work, looking for work or unable to work. It brings together six older benefits and helps make sure you’re getting the financial support you are entitled to in one place.

Most tax credits customers are eligible for Universal Credit. For independent advice, or to find out what other financial support might be available to you, you can speak to an independent benefits adviser.

With Universal Credit, you may also be eligible for more financial support to cover other costs such as housing, certain bills and more. It can also help pay for childcare costs and give you access to a work coach, who can give you tailored guidance on improving your skills and progressing at work to help you support your family.

It adapts to your life too – for example, if you’re claiming Universal Credit and find yourself out of work unexpectedly, your Universal Credit payment will adjust automatically to support you. And if you want to take on more work, you may still be eligible for Universal Credit to make it financially worthwhile.

Here are some steps you can take to get ready for your move to Universal Credit:

• use an independent benefits calculator to estimate how much you could get on Universal Credit. These are free to use and anonymous. If the amount you are entitled to on your existing benefits is more than you will get on Universal Credit, where eligible, you can receive a top up amount called Transitional Protection
• find out what support you can get to prepare and move to Universal Credit
• check your savings. If you are currently claiming Tax Credits and have over £16,000 in money, savings, or investments you can still be eligible for Universal Credit for one year after you move across, but it’s important to wait for your Migration Notice letter before you switchover and follow the instructions in the letter closely
• See how any outstanding money you may owe could be recovered by Universal Credit – this may include tax credit overpayments. If you’re unsure whether you have tax credit overpayments, or how much they might be, you can check with HMRC. www.gov.uk/government/organisations/hm-revenue-customs