Universal Credit and Tax Credits: Three-month warning issued to claimants as payments may stop if they don't take action

Tax credits are being replaced by Universal Credit as part of the wider move to merge all benefits into UC, which has already seen unemployment benefits and others moved across.

Now, people who claim tax credits are being told they must register for Universal Credit in order to keep receiving the money after the switchover. Tax credits are means-tested benefits for workers or families on a low income. They are administered and paid by His Majesty's Revenue and Customs (HMRC).

Anyone who claims tax credits and is state pension age or over, will be asked to apply for Universal Credit or Pension Credit, depending on their circumstances.

If people on tax credits do not claim, they risk this benefit being discontinued.

The changes come as a part of the Managed Migration scheme, which is rolling over all forms of means-tested benefits and tax credits to Universal Credit.

The Department for Work and Pensions aims to contact all remaining legacy benefit claimants by December 2025 informing them, and closing legacy benefits by the end of March 2026.

The DWP has also added a “grace period” for claimants who miss their deadline but claim within a month of it, saying that they will be treated as if they met the deadline and can get transitional protection in their Universal Credit award.

Those protected under a ‘transitional protection’ apply if they are moving to Universal Credits via ‘managed migration’ with a lower notional entitlement, giving them a top up so they don't lose money in the move.

The DWP has previously said: “Your 2024 to 2025 tax credits notices may show some predicted payments for the tax year 2025 to 2026. These are automatically generated and should be disregarded.”

The DWP has also introduced an ‘enhanced support journey’ scheme for income related claimants needing help to claim Universal Credit including home visits and contact via telephone call.

If you require assistance moving to Universal Credit after a Migration Notice letter you can call the notice helpline.

Full information can be found here.