Moving from Tax Credits to Universal Credit? – Check your other entitlement.

Tax Credit claimants moving to Universal Credit should check their other entitlements as this change may have unforeseen consequences to household income.

Due to the closure of Tax Credits by 5 April 2025 claimants who are currently receiving these payments will have to move to Universal Credit. However, some claimants may be in receipt of other benefits because of meeting the eligibility due to being in receipt of Tax Credits and so need to check the again criteria to ensure continued eligibility.

For example, to be eligible for the Healthy Start Card:

Those on Tax Credits must have an annual income of £16,190 or less;

whereas those on Universal Credit must have take home pay of £408 per month or less.

This is a reduction in the income threshold of over £10,000 per year.

And as another example, the income thresholds are much closer for Free School Meals and the Uniform Allowance:

Those on Tax Credits must have an annual income of £16,190 or less,

whereas those on Universal Credit must have net household earnings not exceeding £15,000 per year.

As can be seen in the examples above, the eligibility criteria can be confusing as the earnings threshold for Tax Credits is stated before Tax and National Insurance are applied, whereas the Universal Credit earnings threshold is after Tax and National Insurance are deducted.

Further information

Households who are still in receipt of Tax Credits will have to move to Universal Credit by 5 April 2025. For further information on how this move to Universal Credit may affect your household and to check eligibility to other benefits contact Employers For Childcare’s Family Benefits Advice Service on 028 9267 8200 or email hello@employerforchildcare.org.