⚠️ We are currently updating our 2021/22 tax guidance across the website
Who can make a claim for universal credit?
Tax credits and benefits
Universal Credit (UC) is a new benefit. It is gradually replacing tax credits and some other benefits. You cannot claim tax credits and UC together. This page explains who is eligible to submit a claim for UC.
⚠️ The UK left the European Union (EU) on the 31 January 2020 and entered a transitional period until 31 December 2020, during which EU law continued to apply in the UK. Please note thatour website guidancereflects the law as it applied before the UK’s departure from the EU and as it continued to apply throughout the transitional period. The UK’s relationship with the EU from 1 January 2021 has now been formally agreed and we will updateour guidancewith any relevant changes as a result of the Trade and EU Cooperation Agreement between the EU and UK over the coming weeks. However, we must stress the need to take advice relating to your own circumstances.
If I claim, will I receive a payment of universal credit?
This page explains who is eligible to claim UC. Even if you are eligible to claim, it does not mean you will be entitled to UC as you have to meet certain basic and financial conditions and then any amount you receive is based on your income, capital and circumstances.
To find out about the basic and financial conditions, visit our website for advisers.
Universal credit roll-out
Universal credit was introduced in April 2013 in a small number of pilot areas. To start with, only people with straightforward circumstances living in selected postcodes were able to claim.
UC completed its roll-out in December 2018. It is now available in all parts of the UK.
Can I claim universal credit?
Universal credit is now fully available in all parts of the UK, this means that most people are eligible to submit a claim for UC (although that does not mean they will be entitled to UC). However, you will not be able to claim UC if you:
- Are a ‘frontier worker’. Frontier workers are people who are ‘in Great Britain’ (under Section 4(1)(c) Welfare Reform Act 2012) or ‘in Northern Ireland’ (under Article 9(1)(c) of Welfare Reform (Northern Ireland) Order 2015) but do not reside in either GB or NI. Crown servants or members of HM Forces who are posted overseas (as defined under the UC Regulations 2013) are not frontier workers
- If you fall into this group, you can continue to make new claims for existing benefits such as tax credits instead of UC.
Until 27 January 2021, if you were entitled to the severe disability premium in income support, income-based jobseeker’s allowance, income-related employment and support allowance or housing benefit or had recently been entitled (although the benefit had ended, you continued to meet the entitlement conditions for the severe disability premium) you were not eligible to claim UC. From 27 January 2021, you can make a claim for UC. A transitional severe disability premium element will be included in the calculation of your universal credit award instead.
If you are single and have reached your state pension credit qualifying age or are part of a couple and you have both reached your state pension credit qualifying age, you will not have any entitlement to UC as there is an upper age limit although you may be able to claim pension credit, depending on your circumstances.
Can I still make a claim for tax credits?
HMRC state that most people can no longer make a brand new claim for tax credits. If you already get working tax credit and want to claim child tax credit or vice versa, you are not affected by UC yet as this is not treated as a brand new claim to tax credits. You can contact HMRC to have the other elements added to your claim.
Similarly, if you are renewing your tax credit claim, that doesn’t count as a brand new claim. Also, if you receive working tax credit which ends and you receive a four-week run-on payment, if you start work again or increase your working hours during that four-week period your entitlement to WTC should continue.
Broadly speaking, from 27 January 2021, HMRC state that the only people who make brand new claims for tax credits are Frontier workers. Frontier workers are people who are ‘in Great Britain’ (under Section 4(1)(c) Welfare Reform Act 2012) or ‘in Northern Ireland’ (under Article 9(1)(c) of Welfare Reform (Northern Ireland) Order 2015) but do not reside in either GB or NI. Crown servants or members of HM Forces who are posted overseas (as defined under the UC Regulations 2013) are not frontier workers.
Until 27 January 2021, if you were entitled to the severe disability premium in income support, income-based jobseeker’s allowance, income-related employment and support allowance or housing benefit or had recently been entitled (although the benefit had ended, you continued to meet the entitlement conditions for the severe disability premium) you were able to make a new claim for tax credits. From 27 January 2021, HMRC say you can no longer make a brand new claim for tax credits and instead will have to claim universal credit. A transitional severe disability premium element will be included in the calculation of your universal credit award instead.
⚠️ Note: The legislation which gives effect to these rules about new tax credit claims is not clear. One interpretation of the current legislation is that some other people may be able to make new claims for tax credits. We have written some guidance for advisers on our specialist website which provides further information about this – however, it is extremely complex and should not be followed without speaking to a welfare rights specialist.
What if I am already claiming tax credits: when will I move to UC?
For the time being, existing tax credit claimants are not affected by the introduction of UC. DWP and HMRC started testing the managed migration process (called ’Move to UC’) in July 2019. This test period was intended last until July 2020 but DWP suspended the pilot in March 2020 due to the impacts of the coronavirus outbreak in the UK. The plans to complete the move have changed several times and although the most recent planning suggests that between November 2020 and September 2024, the majority of other tax credit claimants will be moved to UC, this may change again due to the coronavirus pandemic.
It is expected that managed migration (‘Move to UC’) will involve DWP writing to existing tax credit claimants asking them to make a claim for UC by a certain deadline date. If they do not, the tax credit claim will end the day before the deadline date. Those who are moved to UC through this managed migration process may receive transitional protection if their UC award is less than the total of their legacy benefits at the point that they are moved over – which is the Government’s way of ensuring there are no cash losers at the point of change without a change of circumstances.
Not all tax credit claimants will move to UC – if you have reached your state pension credit age (or in a joint claim both of you have reached state pension credit age) you will not be able to claim UC. The intention is that you will claim pension credit for support.
The only way you will move to UC before the managed migration exercise if:
- You choose to make a claim for UC – if you think you may be better off by claiming UC then you might be able to claim it depending on where you live. You must get advice before doing this, some people are better off claiming UC, others are worse off compared to tax credits.
- You have a change of circumstances that ends your tax credit award – for example you are claiming working tax credit only and lose your job and need to claim out of work support or you are single and move in with someone and you need to make a new joint claim for support.
- You need to make a claim for another benefit that has been replaced by UC – for example you need to claim help with your rent then you will not be able to claim housing benefit and instead will have to claim UC. This will automatically end your tax credits award.