Transitional protection deadline passed for tax credit claimants

Tax credits have ended and been replaced by Universal Credit, and the deadline to get transitional protection has passed for tax credit claimants who were invited to move to Universal Credit¹. The Department for Work and Pensions updated its guidance for people of State Pension age who receive a Migration Notice letter to reflect both changes¹. The guidance applies to England, Scotland and Wales, with separate guidance for Northern Ireland¹.

Transitional protection is a top up paid where the amount someone was entitled to on tax credits was more than they get on Universal Credit. It is paid automatically to people who got a Migration Notice letter and made a Universal Credit claim by their deadline date¹. The guidance states that to continue getting financial support, a claim for Universal Credit must have been made by the deadline date¹.

Income-based Jobseeker's Allowance and Income Support have also ended and been replaced by Universal Credit¹. Housing Benefit is ending too, apart from certain circumstances, and will end even if someone decided not to claim Universal Credit¹. Where someone does not claim Universal Credit, or stops claiming it, they may be eligible to reclaim Housing Benefit within three months, and a claim can only be backdated for up to three months¹. Housing Benefit ends two weeks after the deadline date¹. People in supported or temporary accommodation continue to have Housing Benefit paid by their local council, even if they decide not to claim Universal Credit¹.

For tax credit claimants who got a Migration Notice letter and claimed with money, savings and investments of more than £16,000, there is no eligibility for Universal Credit if more than £16,000 remains after 12 assessment periods, each of which is a month¹. Universal Credit is paid once a month, usually into a bank, building society or credit union account, and it usually takes around five weeks to get the first payment¹. An advance can be applied for while waiting, repaid in instalments from future Universal Credit payments¹.

Why it matters for households

The passing of the transitional protection deadline means tax credit claimants who were invited to move to Universal Credit and did not claim by their deadline date no longer have access to the top up that matched their previous tax credit entitlement¹. The practical effect falls on households whose tax credit award was worth more than their Universal Credit award, since the top up was the mechanism that preserved the difference¹.

Housing costs are a second point of change. Housing Benefit ends two weeks after the deadline date, and it ends even where no Universal Credit claim was made¹. People who did not claim Universal Credit, claimed but were not entitled to it, or stopped receiving it may be able to reclaim Housing Benefit within three months, with backdating limited to three months¹. Those in supported or temporary accommodation keep their Housing Benefit from the local council¹.

For people of State Pension age on Universal Credit, the benefit cap does not apply where they are State Pension age, still working, or received a Migration Notice letter¹. Pension income is deducted from Universal Credit and treated as income, though a deferred State Pension is not treated as income for 12 assessment periods; after that, the pension someone is entitled to counts as income even if they have not taken it¹. Claiming Pension Credit instead of Universal Credit means no Pension Credit transitional protection and possibly less financial support¹.

What happens next

The guidance sets out the position after the deadline rather than a further deadline. People who are employed or self-employed are not expected to look for work during their first 12 assessment periods, and can continue working with no work-related conditions for that period¹. After 12 assessment periods, a minimum earnings threshold applies, and a claim is closed if earnings drop below it for three months in a row¹. The Universal Credit Migration Notice Helpline is open Monday to Friday, 8am to 6pm, on 0800 169 0328¹.