The UK government is making changes to tax credits, which could impact many claimants. If you receive a letter from the Department for Work and Pensions (DWP), it may mean your tax credit payments are ending. HM Revenue and Customs (HMRC) has confirmed that tax credits will officially stop on April 5, 2025.
To continue receiving financial support, claimants must move to Universal Credit before the deadline. This article explains what the Migration Notice Letter means, how your payments might change, and why it’s crucial to act fast.
Who Will Be Affected by the Tax Credit Changes?
The government is replacing tax credits with Universal Credit. If you receive any of the following benefits, you will need to move to Universal Credit to continue receiving financial support:
- Child Tax Credit
- Working Tax Credit
- Income-based Jobseeker’s Allowance (JSA)
- Income Support
- Housing Benefit
- Income-related Employment and Support Allowance (ESA)
If you are currently receiving any of these benefits, you should expect a Migration Notice Letter from the DWP, which will explain the steps you need to take.
How Will Your Payments Change When Moving to Universal Credit?
When switching to Universal Credit, your payments may be different from what you received through tax credits. However, transitional protection is available to help prevent financial loss.
For example:
- If you currently receive £327.91 per month in tax credits but your Universal Credit entitlement is only £227, you will receive transitional protection of £100.91.
- This ensures that your total income remains at £327.91 per month, at least temporarily.
However, transitional protection is only available if you apply for Universal Credit before the deadline mentioned in your Migration Notice Letter and your circumstances remain the same.
Why You Should Not Delay Moving to Universal Credit
If you receive a Migration Notice Letter, it is essential to apply before the deadline. Delaying could result in a loss of financial support and make it harder to qualify for Universal Credit later.
Key Benefits of Moving to Universal Credit on Time:
Exemption from certain Universal Credit rules – For example, normally, if you have savings over £16,000, you cannot claim Universal Credit. However, if you move from tax credits to Universal Credit before the deadline, this rule will not apply for the first 12 months.
- Guaranteed transitional protection – This helps maintain your current level of income.
- Avoid loss of benefits – If you miss the deadline, your tax credits will stop, and you may not be eligible for Universal Credit.
After 12 months, if your savings are still over £16,000, you will no longer be eligible for Universal Credit.
Special Rules for Mixed-Aged Couples Claiming Tax Credits
If you and your partner are of different ages (one above and one below the State Pension age), special rules apply when switching to Universal Credit.
What You Need to Know:
You must apply as directed in the Migration Notice Letter.
If you apply incorrectly or miss the deadline, you could lose your tax credits and Housing Benefit.
Even if you are working and have savings over £16,000, you can still claim Universal Credit if you apply on time.
- If you receive a Migration Notice Letter, do not ignore it. The deadline for moving to Universal Credit is April 5, 2025, and failing to take action could result in loss of financial support. Universal Credit offers transitional protection, ensuring that claimants do not immediately lose income.
However, this protection is only available if you apply before the deadline and your circumstances remain unchanged. If you receive tax credits, check your mail regularly, act promptly, and ensure you understand the steps required to secure your benefits under Universal Credit.
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FAQ’s
What is the DWP Migration Notice Letter?
The DWP Migration Notice Letter is an official notification informing tax credit claimants that they must switch to Universal Credit before April 5, 2025.
Who will be affected by the tax credit changes?
Anyone receiving Child Tax Credit, Working Tax Credit, Income-based JSA, Income Support, Housing Benefit, or Income-related ESA must transition to Universal Credit.
What happens if I don’t move to Universal Credit in time?
If you miss the deadline, your tax credits will stop, and you may lose financial support. You will have to apply for Universal Credit separately, without transitional protection.
What is transitional protection under Universal Credit?
Transitional protection ensures that if your new Universal Credit entitlement is lower than your previous benefits, you receive an additional payment to cover the shortfall temporarily.
Can I claim Universal Credit if I have over £16,000 in savings?
Yes, but only if you move from tax credits to Universal Credit before the deadline. After 12 months, the savings rule will apply, and you may no longer be eligible.
What should mixed-aged couples claiming tax credits do?
Mixed-aged couples must apply for Universal Credit as directed in their Migration Notice Letter. If they fail to do so correctly, they could lose their tax credits and Housing Benefit.
