Tax credits are ending

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 gov.uk 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.