DWP scraps benefit from April 5 and sends out letters to thousands who claim

The Department for Work and Pensions (DWP) is officially ending HMRC tax credit payments starting April 5, 2025, as part of the UK government’s managed migration system. This initiative aims to transition eligible claimants from legacy benefits, like Working Tax Credit and Child Tax Credit, to the more modern Universal Credit (UC) system.

If you or your partner are of State Pension age and currently claim Working Tax Credits or a combination of Working Tax Credits and Child Tax Credits, you’ll be affected by this change.

What Is the Migration Notice and Why Is It Important?

Thousands of claimants will receive a letter called a Migration Notice from the DWP or the Department for Communities. This letter outlines the next steps for transferring to Universal Credit and provides key deadlines:

• You must apply for Universal Credit within three months of the date on the Migration Notice.
• Failing to apply within this timeframe could result in losing your financial support.
• If you’re receiving Housing Benefit, your entitlement will end the day before the three-month deadline but will continue for an extra two weeks after your tax credits stop to ease the transition.

What Action Do You Need to Take to Avoid Losing Benefits?

If you receive the Migration Notice, follow these steps to secure continued financial support:

• Apply for Universal Credit:

  • Use the details in the Migration Notice to submit your claim.
  • Applications must be completed within the three-month window to prevent interruptions.

• Keep Track of Deadlines:

  • The three-month deadline is calculated from the date listed on your letter.
  • Late applications may result in missed payments.

• Consider Your Current Benefits:

  • If you’re on Housing Benefit, the DWP will provide a two-week run-on to help with rent during the transition.

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Can You Claim Universal Credit If You Have Savings?

Unlike traditional eligibility rules, you can claim Universal Credit during the migration period even if you have savings over £16,000 for up to 12 assessment periods (approximately a year).

This adjustment ensures that claimants transitioning from tax credits won’t be penalized for savings that previously disqualified them from Universal Credit.

What Happens to Housing Benefit During the Transition?

For claimants receiving Housing Benefit:

• Your entitlement ends the day before the three-month deadline stated in your Migration Notice.
• You’ll receive an additional two weeks of Housing Benefit after your tax credit claim ends.
• This helps cover any potential gaps between benefits and ensures you can meet rental obligations.

FAQs

Why are HMRC tax credits being stopped?

The UK government is phasing out tax credits to simplify the benefits system by transitioning claimants to Universal Credit.

When do HMRC tax credit payments end?

All HMRC tax credit payments will end on April 5, 2025.

What should I do if I receive a Migration Notice?

You must apply for Universal Credit within three months of the date on your Migration Notice to avoid losing benefits.

Can I still receive Housing Benefit during the transition?

Yes, Housing Benefit will continue for two weeks after your tax credits stop to provide financial support during the migration.

What happens if I miss the Universal Credit application deadline?

Failing to apply within the three-month window could result in a loss of financial support.

Can I claim Universal Credit if I have savings over £16,000?

Yes, during the migration, you can claim Universal Credit even with savings over £16,000 for up to 12 assessment periods.

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