Starting at the end of this week, the Department for Work and Pensions (DWP) will stop issuing Tax Credit payments as it continues the transition of claimants to Universal Credit or Pension Credit.
While many individuals have already migrated to the new system, some people who are not eligible for Universal Credit or Pension Credit will see their final Tax Credit payment issued by 5 April 2025.
Why the Change? Transition to Universal Credit or Pension Credit
The government’s goal is to simplify the benefits system by replacing older “legacy benefits,” such as Tax Credits, with a more streamlined approach using Universal Credit and Pension Credit.
According to Gov.uk, no Tax Credit payments will be made after 5 April 2025. Eligible individuals will be contacted via letter and must follow the instructions to complete their application for Universal Credit or Pension Credit.
Migration Notices: What You Need to Do
DWP has been sending out Migration Notices informing recipients that they must apply for Universal Credit before the deadline stated in their letter.
| Key Requirement | Details |
|---|---|
| Who must apply | Tax Credit recipients who qualify for Universal Credit or Pension Credit |
| Application process | Not automatic – a new claim must be submitted |
| Deadline to apply | As mentioned in the Migration Notice letter |
| Risk of not applying | Loss of benefit payments beyond 5 April 2025 |
Failure to apply in time may result in loss of entitlement and interruption of financial support.
Legacy Benefits Being Replaced
Here’s a breakdown of the benefits being phased out and their replacements:
| Legacy Benefit | Replaced By |
|---|---|
| Child Tax Credit | Universal Credit |
| Working Tax Credit | Universal Credit |
| Housing Benefit | Universal Credit |
| Income Support | Universal Credit |
| Income-based Jobseeker’s Allowance (JSA) | Universal Credit |
| Income-related Employment and Support Allowance (ESA) | Universal Credit |
What If Your Universal Credit Is Less Than Your Tax Credit?
If you receive less under Universal Credit than you did with your previous benefits, you may be eligible for Transitional Protection.
This is a temporary top-up payment that ensures you don’t lose out financially due to the transition.
| Situation | Outcome |
|---|---|
| Universal Credit is equal or higher | No action needed |
| Universal Credit is lower | Transitional Protection may apply |
| Transitional Protection is time-limited | Yes – it may reduce over time or stop |
Final Notes: Act Before the Deadline
The migration from Tax Credits to Universal Credit or Pension Credit is a major change affecting thousands of households. To avoid losing financial support:
- Read your Migration Notice carefully
- Submit your Universal Credit or Pension Credit application before the deadline
- Check if you qualify for Transitional Protection
Those who are not eligible for Universal Credit or Pension Credit will receive their final Tax Credit payment by 5 April 2025.
FAQs
What is a Migration Notice?
It’s a letter from DWP Benefit informing you that your Tax Credits are ending and that you need to apply for Universal Credit or Pension Credit.
Is the migration automatic?
No. You must apply manually for Universal Credit or Pension Credit before the deadline mentioned in your letter.
What happens if I miss the application deadline?
You could lose your benefit payments entirely. Apply as soon as you receive your notice.
Can I get extra help if my new payments are lower?
Yes, you may qualify for Transitional Protection, which tops up your Universal Credit to match your previous benefits.
Who is not eligible for Universal Credit?
Some individuals may not meet income or residency criteria. They will stop receiving Tax Credits after 5 April 2025 and may need to explore other forms of support.