Universal credit: Existing tax credit claimants
This section of the website looks at how existing tax credit claimants are affected by Universal Credit (UC).
Existing tax credit claimants can continue with their tax credit awards until they either:
- make a claim for UC because they choose to
- have to claim UC because of a change in their circumstances or;
- are selected DWP and HMRC’s formal migration exercise to move remaining tax credit claimants to UC (or pension credit).
DWP initially started testing the processes they will use to move existing tax credit claimants across to UC in July 2019. However, in March 2020, the initial pilot to test the processes was suspended due to the impacts of the Coronavirus outbreak in the UK. DWP resumed their work on the formal migration exercise during 2022 and from May 2022 they began to issue formal migration notices. DWP have been developing their processes gradually as the numbers of people and the complexity of the case load selected for migration increase.
The first 500 migration notices were issued in just 2 areas (Bolton and Medway), with further areas added over the 2022 summer, including a further 500 in Bolton and Medway, 250 in Truro and Falmouth and then a further 250 in Harrow and Northumberland from September 2022. The exercise is graduallyexpanding up in other areas and in greater numbers ahead of scaling up to complete the migration by the end of the 2024/2025 tax year.
We explain the latest information in our managed migration ('Move to UC') section.
We expect that those who have reached state pension credit age will move to pension credit in a similar exercise, although no details have been released about this yet. Most mixed-age couples will be expected to move to UC but there are some exceptions. See our pensioners page for more information.
Existing tax credit claimants can move to UC outside the formal exercise through either ‘voluntary migration’ or 'natural migration'. This happens if:
- they choose to make a UC claim (voluntary migration). Some existing tax credit claimants may be financially better-off claiming UC instead of tax credits but this is a vey complicated area and specialist advice must be sought before making this decision as it is not possible to go back to tax credits once the UC claim has been made.
- they have a change in circumstances that ends their tax credit claim but they need to continue claiming support (e.g. change from joint to single household) (natural migration)
- they need to make a claim for another benefit that has been replaced by UC. For example, a tax credit claimant who needs to make a claim for help with their rent would have claimed housing benefit previously. However, housing benefit (in most cases, although there are some exceptions) has been replaced by UC. So to access help with their rent they need to make a UC claim which in turn will end their tax credits claim. (natural migration)
they don’t renew their tax credits in time and the tax credit claim can’t be reinstated so they need to make a fresh claim for support (see our tax credit renewals section).
We explain more about how tax credit claims are brought to an end in these situations in our making a universal credit claim section. We also consider what happens if someone accidentally or mistakenly claims UC.
We explain which changes of circumstances will end a tax credits claim and require a UC claim in our changes of circumstances section.
Finally, we look at how HMRC finalise tax credit claims for someone moving to UC in our finalising tax credits claims section and what happens to tax credit debt when someone moves to UC in our tax credits debt section.
Last reviewed/updated 13 September 2023