Tax credits are ending

If you get tax credits and no other benefits (some exemptions apply), you may be asked to claim Universal Credit instead.

From September 2023, the Department of Work and Pensions (DWP) are sending migration notices to Lancashire residents, giving you three months to claim Universal Credit.

If you do not make a valid claim within three months, your tax credits will end and you will not get Universal Credit.

Tax credits are ending for people who get Child Tax Credit, Working Tax Credit or both and get no other benefits*.

The Department for Work and Pensions (DWP) will send you a letter when it is your time to change benefit. The is called a 'migration notice' and it will explain what you need to do and when.

This is called 'managed migration'.

* Other benefits include:

  • Income-based Jobseekers Allowance
  • Income-related Employment and Support Allowance
  • Income Support
  • Housing Benefit

Managed migration to Universal Credit

Migration deadline

Your 'migration notice' (letter from the DWP) will give you a date by which you need to claim Universal Credit.

If you do not claim Universal Credit by this date, your Tax Credits will end, and you will not qualify for Universal Credit.

If you cannot make your claim in time, you should notify Universal Credit at least a week before the deadline to ask for an extension.

Amount of Universal Credit

Universal Credit is paid monthly in arrears. The amount of Universal Credit you'll get will depend on your personal circumstances and the date you make the claim.

The calculation and erosion of the transitional element is very complex. You can contact the Citizens advice Help to Claim service for further advice 0800 144 84444.

Transitional element

If your Universal Credit entitlement is less than the amount of benefits you were receiving on Tax Credits, your Universal Credit may include a transitional element. This is to try and make sure you are not worse off on Universal Credit when you transfer. 

You must claim Universal Credit by your deadline to qualify for a transitional element.

Preparing for Universal Credit

Your circumstances and the timing of your claim can affect your entitlement to Universal Credit.

Here are some issues and information to be aware of before you make your claim:

Check your eligibility for other benefits

If you're disabled or care for someone who is disabled, you should check that you're getting all the benefits you're entitled to.

The amount of Universal Credit you may get, depends on the amount of benefits you get before you migrate. You may not be able to claim any missing premiums after migration on to Universal Credit.

You can find more information about other benefits on our benefits and support for your household web page.

Making a valid claim

It is important to get all your details right or you could lose out on financial support that you are entitled to.

You 'll need to provide proof of your:

  • identity
  • income
  • rent and landlord details

You must attend Jobcentre appointments, provide proof and any other information needed within 30 days of making your claim.

You can find further information on what you need to provide when claiming Universal Credit at GOV.UK, Universal Credit - How to claim.

If you cannot provide the requested information within 30 days of claiming, contact Universal Credit to explain and see if you can get an extension. Extensions are discretionary, so it is best to try and provide all the information and comply with requests within the time given.

Other circumstances

Your savings and capital are not counted when calculating your Tax Credits payments. But they are counted for Universal Credit.

You usually do not qualify for Universal Credit if you have savings or capital of more than £16,000.

If you claim Universal Credit as part of the managed migration process, your savings and capital over £16,000 will not be counted for the first 12 months (called assessment periods).

If you have savings or capital of more than £16,000 after the 12 months, you will no longer qualify for Universal Credit and your award will end.

If your savings reduce to below £16,000 within the 12-month protected period, your protected period ends immediately. This means that if your capital then increases again above £16,000, your Universal Credit award will end immediately, even if you are within the original 12 months of claiming.

Any savings you have between £6000 and £16,000 will reduce your Universal Credit award with a £1 deduction for every £250.

The government has capped the amount of benefits someone can get each week/month. If your total benefit entitlement is more than the capped amount, a deduction will be made.

The benefit cap currently is:

  • £326.29 per week if you are single without children
  • £486.98 per week if you are a couple or lone parent

Benefits counted for the benefit cap are:

  • Jobseekers Allowance
  • Employment and Support Allowance
  • Child Benefit
  • Maternity Allowance
  • Widowed parent's allowance
  • Window's pension

The benefit cap does not apply if you or your partner are:

  • working and earning above a certain amount of money,
  • you, your partner or child get a disability benefit or a carer benefit
  • if you are within the first 9 months of your Universal Credit claim

If you're a student and you meet the criteria, you can claim tax credits. But students can only claim Universal Credit in very limited circumstances.

If you are a student claiming tax credits and you receive a migration notice, you can claim Universal Credit until the end of your current course.

Student income may be taken into account when calculating your entitlement. Once you finish your current course, your Universal Credit will end unless you meet the criteria for claiming Universal Credit as a student.

If you're a couple claiming Tax Credits and you receive a migration notice, both of you will need to claim Universal Credit and agree to a claimant commitment.

This means that both of you may have work-related requirements and need to continue to meet those requirements to get Universal Credit.

You can find more information on the claimant commitment and requirements on at Universal Credit and your claimant commitment.

Your Universal Credit amount is based on the income you get in an assessment period. If you get an extra payment (such as a backdated pay increase, bonus or holiday pay), your Universal Credit will reduce, or you may not qualify.  If you are affected by this issue then you are advised to speak to you Universal Credit Work Coach via your online account of by calling the UC Helpline on 0800 328 5644.

If you are asked to claim Universal Credit as part of the managed migration process, it is important to think about when you make your claim.  If your deadline allows it, it may be best to claim Universal Credit after you get your backdated pay or lumpsum. The extra payment will then not be included in your Universal Credit calculation.

Depending on your deadline, you may have to claim Universal Credit in the month before you get an extra payment.  It is important to know that tax credits will stop immediately and your first Universal Credit payment may be lower (or zero) due to the extra payment.

Claiming Universal Credit

You can claim Universal Credit:

  • online on at GOV.UK: Universal Credit
  • by calling the Universal Credit helpline on 0800 3285644
  • or by contacting Citizens Advice Help to Claim on 0800 144 84444