Tax Credits warning for thousands who could be WORSE off on Universal Credit

THOUSANDS of people claiming Universal Credit could be worse off on Universal Credit.

Over two million getting older benefits are set to move to the new welfare system by the end of 2024.

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Around 500 people will start being moved from legacy benefits this month, with more to follow under managed migration.

This is when people are invited to switch to Universal Credit, if they haven’t already moved by choice or through a change in circumstance.

An estimated one million people are currently claiming child tax credits or working tax credits.

The majority of them – 700,000 – will be better off on Universal Credit, and another 50,000 will see no change.

But around 300,000 are expected to be WORSE off, and should not make the move until invited otherwise they could lose out.

Government research shows that thousands of people on tax credits will need to be given extra payments on top of Universal Credit when they move over.

Known as transitional payments, this will top up the new benefit so they don’t lose cash in the short term.

These top ups will only be available under managed migration though, and not if making the move voluntarily.

Millions on tax credits and legacy benefits have been urged to make the switch now to get higher benefit payments.

But everyone should check carefully and seek advice before making the move so they won’t be worse off.

How do I check if I’m better off on Universal Credit?

You can chose to move over to Universal Credit from tax credits at any time – but you might not be better off.

You should consider carefully what moving over means for your money, as you can’t move back once you’re on Universal Credit.

Using an online benefits calculator can help you compare and are free and easy to use from charities such as Turn2Us and EntitledTo, and it’s also worth asking them for advice.

You may be moved over to Universal Credit automatically if you have a change in circumstances, like moving home, a change in working hours or a have a baby.

Eventually everyone will be moved over to Universal Credit. This is known as “managed migration” and plans for this were paused due to the coronavirus pandemic.

The process is starting again from May 9, initially with a small number of people, and the government has a goal date of moving everyone over to Universal Credit by 2024.

If you check and you won’t be better off on Universal Credit you should stay on tax credits.

You will be moved eventually but you will get transitional protection under managed migration, which means you will get payments topped up so you won’t lose income.

But you won’t get this if you move over voluntarily.

If you do find you’re better off on Universal Credit you can start making a claim straight away.

But beware that your tax credits will stop as soon as you do this, according to Turn2Us, but if there’s a delay you could be overpaid tax credits and might have to pay some money back.

You will also have a five week wait for your first Universal Credit payment, which could leave you short.

You can get an advance, which is interest-free, but you’ll pay this back in instalments from future payments which will reduce how much you get each month.

Moving to Universal Credit can affect other benefits you get, so check this carefully too.

For example if you’re getting council tax help you’ll need to tell your local authority you’ve switched to Universal Credit.

It’s best to seek advice before moving to Universal Credit, as well as using a benefit checker to see if you’ll be better off.

You can get free and independent advice from:

This post first appeared on thesun.co.uk