The Department for Work and Pensions (DWP) has issued a stark warning to tax credit claimants, urging them to act promptly or face losing their benefits by April 2025. This major overhaul of the welfare system will see claimants transitioned to Universal Credit or Pension Credit as the old tax credit system is phased out.
More than half a million families across the UK could be affected, with the government highlighting that action must be taken within three months of receiving an official migration notice. Claimants who fail to meet the deadline risk losing financial support entirely.
DWP An Unprecedented Shift in the Welfare System
One of the biggest welfare reforms in recent years is the choice to switch from tax credits to Universal Credit. The DWP claims that this action attempts to give claimants a single platform and streamline the benefits system. Those receiving Housing Benefit, Income Support, Jobseeker’s Allowance, or Income-Related Employment and Support Allowance must actively apply for Universal Credit as a result of this change.
Unlike previous benefit changes, the migration process is not automatic. Claimants will receive a letter from the DWP detailing the steps they must take to apply for the new system. Once the letter is received, recipients have a three-month window to submit their claim. The DWP has emphasised the importance of acting within this timeframe to avoid disruptions in financial support.
Transitional protections are being offered to ensure that those who would receive less under Universal Credit compared to their previous benefits are not worse off immediately. These protections include a temporary top-up payment that will gradually taper off over time.
Who Is Affected and What Steps to Take
The DWP estimates that approximately 594,000 families claiming tax credits in April 2024 will be affected by these changes. Those who fail to act by the April 2025 deadline will see their benefits discontinued entirely. For some, this could mean a significant loss of income if the migration process is not completed.
Claimants are advised to carefully read their migration notice and act swiftly. Additional guidance and support are available through Citizen’s Advice and the Universal Credit Migration Notice Helpline. Those who require more time to make their claim due to exceptional circumstances must contact the helpline before their deadline to request an extension.
The DWP has reassured claimants that assistance is available for those navigating the process, but emphasised the need for timely action. Failure to apply for Universal Credit or Pension Credit could have serious financial consequences for families relying on this support.
