500,000 face tax credit claimants loss in Universal Credit shake-up

The DWP is warning households claiming tax credits that they will be transitioned to Universal Credit by the end of March 2025 - but that the process is not automatic

Almost half a million people claiming tax credits have been given a six-month warning to ensure they continue to receive benefits. This comes as as the government transitions all two million claimants on legacy benefits to Universal Credit by the end of March 2025.

Those receiving tax credits do not need to take action until they receive a migration notice letter from the Department for Work and Pensions. However, once received, it is crucial to act quickly to avoid having benefit payments cut off.

The government is phasing out legacy benefits, including Tax Credits, Housing Benefit, Income Support, Jobseeker's Allowance, and Income-Related Employment and Support Allowance, in favour of Universal Credit through a process known as 'managed migration'.

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Claimants who receive a letter will have three months to switch to Universal Credit. Sir Stephen Timms, Minister for Social Security and Disability at the Department for Work and Pensions, urged recipients to plan ahead, stating: "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."

It's vital for people to know that swapping to Universal Credit doesn't happen by itself, so it's essential to apply within three months once you get a migration notice.

Timms said: "Once you receive your migration notice, regardless of which old benefit you claim, do not delay in responding. The process is quick and easy which will make sure your future benefit entitlement is secured."

The Department for Work and Pensions ( DWP ) has been busy since July 2022, dispatching nearly 1.14million migration notices.

Yet, DWP's freshest stats reveal that from July 2022 until June 2024, a shocking count of 284,660 recipients saw their benefits stop due to negligence regarding their migration notices.

Meanwhile, some 623,310 folks have smoothly transferred to Universal Credit, with an additional 232,830 still on the move.

Back in January, official announcements revealed the volume of migration notices pegged for dispatch in the new fiscal year.

Previously, the game plan centred exclusively on those pocketing tax credits when migration notices were being sent out.