Urgent Universal Credit warning for thousands of people as letters land on doormats – check if you’re affected
THOUSANDS of people could be worse off moving to Universal Credit from tax credits as renewal packs land on doormats.
HM Revenue and Customs (HMRC) will finish sending households on tax credits the letters by next week.
The Department for Work and Pensions (DWP) will start moving those on tax credits to Universal Credit across the whole of the UK from September.
Around 700,000 individuals will be better off following a move from the legacy benefits to Universal Credit, while another 50,000 will see no change.
But 300,000 could be worse off, and should not move until they absolutely have to as they could end up with less money.
Where someone’s Universal Credit payment is lower than their legacy benefits entitlement, they will usually be eligible for a top-up payment known as Transitional Protection.
This means that their Universal Credit entitlement will be the same as their legacy benefit entitlement at the point they move.
It comes after managed migration notices were sent out to over 500,000 claimants currently in receipt of tax credits in Avon, Somerset and Gloucester.
There are two types of tax credits – working tax and child tax credit.
By September, the DWP expects to have made contact will all households on tax credits in all regions of Great Britain.
It’s expected that all tax credit claimants will move over to Universal Credit by the end of 2024 when the legacy benefit will be scrapped for good.
An estimated 1.5million people are currently claiming child tax credits or working tax credits.
Recipients who receive a migration notice and fail to act will risk losing their current benefits entitlements.
It’s also worth noting that a change in circumstances before you receive a managed migration notice might deem you ineligible for tax credits and if so you’ll may be asked to apply for Universal Credit directly instead.
You can actually choose to move over to Universal Credit from tax credits at any time – but it’s best to check before doing so as you might not be better off.
You should consider carefully what moving over means for your money, as you can’t move back once you’re on Universal Credit.
Using an online benefits calculator can help you compare and are free and easy to use from charities such as Turn2Us and EntitledTo, and it’s also worth asking them for advice.
If you do find you’re better off on Universal Credit you can start making a claim straight away.
Moving to Universal Credit can affect other benefits you get, so check this carefully too.
The renewal packs for tax credits started being issued on May 2 and will continue to be posted until Thursday, June 15.
Customers have until July 31 to check the information in their renewal pack is correct.
They’ll need to notify HMRC of any changes to their circumstances which may affect their claim.
It’s best to seek advice from Entitleto, Turn2Us or Citizens Advice before moving over.
What is Universal Credit?
Universal Credit is a welfare scheme that was designed to combine a number of old “legacy benefits” into a single monthly payment.
Whether you are eligible will depend on your individual circumstances.
You may be eligible if you meet all of the following criteria:
- You’re on a low income or out of work
- You’re 18 or over (there are some exceptions if you’re 16 to 17)
- You’re under State Pension age (or your partner is)
- You and your partner have £16,000 or less in savings between you
- You live in the UK
How much is Universal Credit?
Universal Credit payments are made up of a standard allowance and then various additional payments that depend on your circumstances.
This is how much you will get as your standard allowance each month:
- Single, under 25 – £292.11
- Single, 25 or over – £368.74
- Couple, joint claimants both under 25 – £458.51 (for both)
- Couple, joint claimants, one or both 25 or over – £578.82 (for both)
You may also get additional payments depending on your circumstances.
You may be able to get a top-up if you have children:
- For those with a first child born before April 6, 2017, the extra amount is £315
- For those with a child born on or after April 6, 2017 or second child and subsequent child, the extra amount is £269.58
- For those with a disabled child, the lower rate additional payment is £146.31 and the higher rate is £456.89
If you have a disability you could get an extra amount depending on your circumstances:
- For those deemed to have limited capability for work, the extra amount is £146.31
- For those deemed to have limited capability for work or work-related activity, the extra amount is £390.06
Universal Credit claimants can get an additional amount if they’re caring for a severely disabled person for at least 35 hours a week.
The amount you get is £185.86.
You can also get an increased work allowance:
- The higher work allowance (no housing amount) for someone claiming Universal Credit with one or more dependent children or limited capability for work is £631
- The lower work allowance for someone claiming Universal Credit with one or more dependent children or limited capability for work is £379
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk