Regulations made abolishing tax credits for state pension age claimants

The Social Security (State Pension Age Claimants: Closure of Tax Credits) (Amendment) Regulations 2024 were made on 7 May 2024 and come into force on 8 June 2024¹. They were laid before Parliament on 9 May 2024¹. The Secretary of State made them under powers in the Social Security Contributions and Benefits Act 1992, the Social Security Administration Act 1992, the State Pension Credit Act 2002 and the Welfare Reform Act 2012¹.

The regulations provide for claimants entitled to working tax credit to move to universal credit with transitional protection, and for claimants entitled to child tax credit to move to pension credit with transitional protection¹. A tax credit closure notice tells the recipient that their tax credit award is to end by a specified day, the deadline day¹. The deadline day must not normally fall within the three months beginning with the day the notice is issued, though a shorter period may apply where the person is already entitled to state pension credit, or where a previous notice was cancelled¹.

Notices may be issued to a person entitled to child tax credit but not working tax credit who is single and has reached the qualifying age, or is in a couple where both have reached that age, or is a member of a protected mixed-age couple; and to a person entitled to both a tax credit and state pension credit¹. Where the award is to joint claimants, a notice must be issued to each¹.

For claimants moved to universal credit, the upper age limit condition does not apply to a single claimant, or joint claimants both of whom, at the time the migration notice is issued, have reached the qualifying age for state pension credit, are entitled to working tax credit and are not entitled to state pension credit¹. The benefit cap does not apply in calculating an award for a single claimant who has, or joint claimants both of whom have, reached that qualifying age¹. Notional unearned income rules do not apply until the assessment period following the first 12 assessment periods of the award where the person has not applied for retirement pension income¹.

For claimants moved to pension credit, a transitional additional amount applies where the weekly amount of child tax credit combined with the weekly amount of state pension credit on the migration day is greater than the indicative state pension credit amount¹. That amount is reduced by the amount of any relevant increase after the first day it applies, and ceases in specified circumstances, including where the claimant stops being responsible for any child or qualifying young person they were responsible for when the notice was issued¹.

The regulations also change housing benefit rules so the applicable amount no longer includes a maximum of two amounts for children or young persons in the household, and provide that a single person does not accrue deferral benefits while in receipt of universal credit¹. Regulation 2 and regulations 4 to 7 extend to England and Wales and Scotland; regulation 3 extends to England and Wales, Scotland and Northern Ireland¹. The Social Security Advisory Committee agreed the proposals should not be referred to it, and no full impact assessment was produced as no significant impact was foreseen¹.

Why it matters for households

Tax credit awards for people who have reached state pension age are to end by a deadline day set out in a closure notice, rather than continuing indefinitely. From 8 June 2024 the Secretary of State can issue those notices¹. Affected households are those entitled to child tax credit only, or to both a tax credit and state pension credit, where the claimant or both members of a couple have reached the qualifying age for state pension credit¹. Working tax credit claimants in that age group move to universal credit with transitional protection; child tax credit claimants move to pension credit with transitional protection¹. Transitional protection is not permanent: the pension credit transitional additional amount is reduced as relevant increases occur and ends in the listed circumstances, and the universal credit waiver of the upper age limit ends when transitional protection ceases or the person claims state pension credit¹. The deadline day is normally at least three months after the notice is issued, so the change does not take effect immediately on receipt¹.

What happens next

The regulations come into force on 8 June 2024¹. Closure notices may be issued at any time after that date, with the deadline day normally no earlier than three months after issue¹. The Secretary of State may change a deadline day to a later day on his own initiative or on request before the deadline day if there is good reason, and must inform the notified person of the new date¹.