DWP issues update on plans to scrap six benefits

The Department for Work and Pensions (DWP) has issued an update regarding its intention to phase out the Tax Credit benefit, one of six going in total. As part of the transition to Universal Credit, the DWP is in the process of shifting individuals who are on legacy benefits.

There are two main types of Tax Credits available: Working Tax Credit and Child Tax Credit. At present, approximately 730,000 people are claiming either or both of these benefits.

According to documents outlining the shift to Universal Credit released by the department last month, the DWP plans to eliminate the provision that presently permits claimants to renew their Tax Credit claims or to apply for the other type of Tax Credit. This change, which is set to take effect next year, will result in the complete cessation of Tax Credit claims from April 6, 2025, reports the Mirror.

The documents state: "Regulation 8 is designed to prevent any renewal of existing Tax Credit claims or allow a person who is claiming one tax credit (for example Working Tax Credit), to claim the other Tax Credit (Child Tax Credit), and vice versa. This will also ensure there are no Tax Credits claims from April 2025.

"Regulation 6A of the Universal Credit (Transitional Provisions) Regulations 2014 states that a person cannot make a claim to a Tax Credit. However, exceptions are provided in Regulation 6A(6) for existing Tax Credit claimants to claim the other Tax Credit and (7) for existing Tax Credit claimants to apply to renew their awards. These exceptions are now removed so there can be no more claims to a Tax Credit. This regulation does not come into force until 06/04/2025."

If you're currently receiving Tax Credits, it's crucial to renew your claim annually. The upcoming renewal in July will be the last opportunity to do so. After this point, you won't be able to renew your benefit claim and new claims for Tax Credits are already not being accepted.

The DWP has been gradually phasing out these legacy benefits over the past few years, resuming the process last year after a brief pause due to the Coronavirus pandemic. When the managed migration restarted, approximately 2.6million people in the UK were still claiming old-style legacy benefits.

Six benefits are being phased out: Working Tax Credit, Child Tax Credit, Income-based Jobseeker's Allowance (JSA), Income Support, Income-related Employment and Support Allowance (ESA), and Housing Benefit. The Department for Work and Pensions (DWP) is gradually implementing Universal Credit, currently focusing on those claiming Tax Credits and Housing Benefit.

When it's your turn, you'll receive a migration notice in the post. Upon receipt, you have three months to submit a claim for Universal Credit, failing which your benefit payments will cease.

Claims can be made online or via phone by calling the Universal Credit Migration Notice helpline at 0800 169 0328. Alternatively, you can consult your local Job Centre. After submitting your claim, there's a five-week wait until your first Universal Credit payment, which will continue unless your circumstances alter.