A letter from the Department for Work and Pensions (DWP) could indicate a halt in payments for some claimants. HM Revenue and Customs (HMRC) tax credits are set to end nationwide, meaning those who don’t act will experience a decrease in their income.
The DWP will send out a Migration Notice Letter stating that tax credits will cease on April 5, 2025. Those affected will have the chance to transfer their claim to Universal Credit, with additional safeguards in place to ensure they don’t lose out on money they were receiving from their tax credits claim.
Some of the HMRC benefits being impacted include Child Tax Credit, Working Tax Credit, Income-based Jobseeker’s Allowance (JSA), Income Support, Housing Benefit, and Income-related Employment and Support Allowance (ESA). How your payments will alter when switching to Universal Credit: If your new Universal Credit entitlement is less than your previous tax credits or benefit, you could receive transitional protection to help make up the difference in what would otherwise be lost.
For instance, if a claimant was receiving the maximum Income Support allowance for a couple both aged over 18, of £6,828 a year (or £569 a month) but their Universal Credit entitlement is initially £400 a month, they will receive a transitional protection of £169 bringing their total Universal Credit entitlement to £569.
It’s crucial to understand that transitional protection can only be granted if the claimant has transitioned to Universal Credit after receiving their Migration Notice letter and has applied before the date specified in the letter. Also, there should be no changes in your circumstances at the time of application.
It’s essential for all those who receive a Migration Notice Letter not to delay their move to Universal Credit. This is because if you claim within the deadline stated in the letter, you will be exempt from certain Universal Credit rules that could otherwise hinder you.
For instance, usually, you cannot claim Universal Credit if you have money, savings, and investments worth more than £16,000. However, if you receive tax credits and make the transition on time, this rule will not apply, and you can still make an initial claim for Universal Credit.
Mixed aged couple claiming tax credits
This specific rule will only come into effect after 12 assessment periods, after which you will no longer be eligible for Universal Credit if you still have money, savings, and investments worth more than £16,000. There are unique migration rules for mixed-aged couples claiming tax credits.
When this group receives a Migration Notice letter, they must follow the instructions exactly when applying for Universal Credit.
If they attempt to claim in a different manner, they risk losing their tax credit and Housing Benefit once the deadline has passed. Mixed age couples can still make a claim, even if they are employed, have renewed their tax credits, and possess over £16,000 in cash, savings, and investments.
Further details on Migration Notices specifically for mixed aged couples can be found here.
