Three month DWP warning to half a million claiming tax credits who risk losing benefits cash
HUNDREDS of thousands of people who claim tax credits have been given a three-month warning to ensure they continue to receive benefits.
The government plans to move all legacy benefits claimants to Universal Credit by March 2026.
People who receive Tax Credits do not need to do anything until they receive a migration notice letter from the Department for Work and Pensions (DWP).
But once they receive the letter it is important they act quickly to avoid having their benefit payments cut off.
The government is phasing out several legacy benefits by March 2025.
These are: Tax Credits, Income Support, income-based Jobseeker’s Allowance (JSA) and Housing Benefit.
The DWP aimed to send migration notices to these households – around 440,000 in total – by September 2024.
Households who receive income-related Employment and Support Allowance (ESA) should receive a letter by December 2025.
The DWP began to send migration notices to these claimants – around 800,000 in total – in September 2024.
All people who receive these benefits will be moved to Universal Credit in a process called ‘managed migration’.
The DWP plans to contact all remaining legacy benefits claimants by December 2025.
Once they receive a letter they have three months to move over to Universal Credit.
Their migration date should be made clear in their migration notice.
Once you move to Universal Credit you cannot go back to your old benefits.
Sir Stephen Timms, minister for social security and disability, warned households not to delay in moving to Universal Credit.
He said: “As we start the new year, families across the country are thinking about what’s next.
Everything you need to know about Universal Credit
- What is Universal Credit? Everything you need to know including how to apply
- Universal Credit calculator: How much can I claim and how do I apply?
- Universal Credit login: How do I sign in to my online account?
- How much can I earn before Universal Credit is reduced and do I get a work allowance?
- What is a Universal Credit advance payment? How to apply and pay it back
- Are Universal Credit payments going up and how much more will I get?
- How to claim Universal Credit if you’re self-employed
- How many hours can I work on Universal Credit and will my payment be reduced?
- What is a Universal Credit budgeting advance and how much could I get?
- What is the Universal Credit housing element and how much of your rent does it pay?
“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.”
He added that government help is available to help you with the transition.
If you need support you can contact its helpline, find guidance on gov.uk or ask for free and independent help from Citizen’s Advice.
The transition to Universal Credit is not automatic, which means it is vital for households to apply for the benefit within three months of receiving their migration notice.
If they fail to do so then their payments could be stopped.
Their entitlement to legacy benefits or tax credits will end when they claim Universal Credit.
If they do not claim Universal Credit then their entitlement to legacy benefits or tax credits will end on the day before their deadline.
How to apply for Universal Credit
You can apply for Universal Credit online.
You must create an account to make a claim.
To do this you will need your bank, building society or credit union account details, an email address and access to a phone.
You may also need to prove your identity with documents such as your driving licence, passport, debit or credit card or a payslip or P60.
You will also need to provide information about your housing, earnings, disability or health conditions, childcare, savings and any investments.
Once you have made an account you need to complete your claim within 28 days or you will need to start again.
If you cannot claim online then you can call the Universal Credit Migration Notice Helpline on 0800 169 0328.
The line is open from Monday to Friday, 8am to 6pm.
If you live with your partner then you need to make a joint claim for your household, even if your partner is not eligible for Universal Credit.
You cannot claim by yourself.
To do this you must both create Universal Credit online accounts.
The first person to create their account will receive a partner linking code, which links the accounts together to make your joint account.
You need to give this code to your partner to use when they create their online account.
Once you have created a joint account you can make a claim for Universal Credit.
If you claim Universal Credit then you will usually get one payment each month.
It takes around five weeks to get your first Universal Credit payment but it could take longer.
What to do if you have problems claiming Universal Credit
IF you're experiencing trouble applying for your Universal Credit, or the payments just don't cover costs, here are your options:
- Apply for an advance – Claimants are able to get some cash within five days rather than waiting weeks for their first payment. But it’s a loan which means the repayments will be automatically deducted from your future Universal Credit payout.
- Alternative Payment Arrangements – If you’re falling behind on rent, you or your landlord may be able to apply for an APA which will get your payment sent directly to your landlord. You might also be able to change your payments to get them more frequently, or you can split the payments if you’re part of a couple.
- Budgeting Advance – You may be able to get help from the Government for emergency household costs of up to £348 if you’re single, £464 if you’re part of a couple or £812 if you have children. These are only in cases like your cooker breaking down or for help getting a job. You’ll have to repay the advance through your regular Universal Credit payments. You’ll still have to repay the loan, even if you stop claiming for Universal Credit.
- Cut your Council Tax – You might be able to get a discount on your Council Tax by applying for a Council Tax Reduction. Alternatively, you might be entitled to Discretionary Housing Payments to help cover your rent.
- Foodbanks – If you’re really hard up and struggling to buy food and toiletries, you can find your local foodbank who will provide you with help for free. You can find your nearest one on the Trussell Trust website.
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