personal finance

Will Universal Credit affect tax credits? How roll out of new system could affect you


Universal Credit is replacing six types of payments, known as legacy benefits. The full list of these are: Child tax Credit, Housing Benefit, Income Support, income-based Jobseeker’s Allowance (JSA), income-related Employment and Support Allowance (ESA), and Working Tax Credit. Universal Credit is currently available across the UK for new applications. Benefits recipients who have a change in their circumstances may also claim Universal Credit.

A pilot scheme for the process of moving current benefits recipients onto Universal Credit was announced earlier this year – something which is called “managed migration”.

The Department for Work and Pensions (DWP) said that this would take place in July 2019, in Harrogate, North Yorkshire.

According to the announcement made in March this year, the numbers of those being moved would increase slowly and gradually, as necessary – before expanding to further locations “as required”.

Gov.uk say: “Universal Credit is being introduced in stages across the UK.

“You do not need to do anything until you hear from the Department for Work and Pensions (DWP) about moving to Universal Credit, unless you have a change in circumstances.”

The government website also informs users that some people may still be able to claim Child Tax Credit, however it “has been replaced by Universal Credit for most people”.

“You can only make a new claim for Child Tax Credit if you get the severe disability premium or got it in the past month and are still eligible for it,” the website states.

“If your child is 16, you can claim up until 31 August after their 16th birthday. If they are in approved education or training, you can claim until their 20th birthday.”

Working Tax Credit is also being replaced by Universal Credit.

At the time of writing, a person can only make a new claim for this legacy benefit if they get the severe disability premium or got it in the past month and are still eligible for it.

Alternatively, it may be possible for a person of working age to apply for Universal Credit.

Those who are of Pension Credit qualifying age may be able to apply for Pension Credit instead.

Last month, the DWP said that there is an overall 60 per cent take-up of Pension Credit.

More than a million people entitled to claim the benefit, are not yet doing so.

Pension Credit recipients who are over the age of 75 will be able to qualify for a free TV licence after the current free TV licence for over 75s scheme comes into effect next year.

READ MORE: Who gets Universal Credit: New guidance for households submitting claim explained



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