Nearly half a million tax credit claimants are at risk of losing their benefits as the government transitions all legacy benefit recipients to Universal Credit.
Half a Million Tax Credit Claimants at Risk of Losing Payments Due to Universal Credit Changes
By Chourouk Derkaoui
Published on 7 October 2024 13:46
Nearly 500,000 tax credit claimants have been warned six months in advance to make sure they keep receiving their benefits as the government moves all two million legacy benefits claimants to Universal Credit by the end of March 2025.
Urgent Action Needed for Tax Credit Claimants Amid Universal Credit Transition
Tax Credit claimants are not required to take any action until the Department for Work and Pensions sends them a migration notice, reports BirminghamLive. In order to prevent benefit payments from being stopped, it is essential to take immediate action after receiving them.
Through a process known as “managed migration” which works in favour of Universal Credit the government is scrapping legacy benefits, such as: Housing Benefit, Tax Credits, Jobseeker's Allowance, Income Support, and Income-Related Employment and Support Allowance.
Claimants have three months to covert to Universal Credit after receiving the notice. Sir Stephen Timms, Minister for Social Security and Disability at the Department for Work and Pensions, highly encouraged recipients to make plans in advance. He said: “I can testify just how busy life can become in just a short space of time.”
“But it is important to plan ahead. I wish to stress this especially if you are in receipt of legacy benefits and thinking about your financial future.”
“In April 2025, tax credits will close, which means for thousands of people their old benefits will no longer be paid. Notices are being sent out to help transfer people to Universal Credit and I strongly urge you to respond to your letter when you receive one.”
“Not responding to your notice may mean these protections are not in place.”
Understanding Universal Credit Migration Notices
It is important to note that transitioning to Universal Credit doesn't happen automatically, it is therefore necessary to apply within three months after receiving a migration notice.
The Department for Work and Pension (DWP) has actively been sending out almost 1.14 million migration notices since July 2022. Nevertheless, the most recent statistics show that from July 2022 until June 2024 more than 280,000 claimants lost their benefits as a result of neglecting their migration notices.
In the meantime, 623,310 people have successfully shifted to Universal Credit, while 232,830 others are still in the process of transferring.
In January, official announcements indicated the number of migration notices scheduled for release in the new fiscal year. In the past, the plan focused solely on people receiving tax credits when the migration notices were issued.