Millions of people are being warned they could be missing out on more than £1,000 in extra money every year.
A new campaign by the Department for Work and Pensions (DWP) has warned people who are claiming certain payments from the government that they could be missing out on vital cash by not switching over to another benefit. As part of the new campaign, the DWP is urging people who are in receipt of working tax credits and/or child tax credit that they could be entitled to more money every month by switching over to universal credit, reports the Daily Record.
Tax credits are set to be phased out in 2024, and the campaign aims to raise awareness to all new and existing working tax credit and child tax credit customers that many current claimants “could be financially better off on universal credit”.
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Here's how much you could get if you switch over to universal credit, according to the new benefit rates which come into effect in April. The government has raised all existing rates by 3.1% for the 2022/2023 financial year, though this presents a real-term cut in payments due to the rising rate of inflation in the UK.
What are the current tax credit rates?
The working tax credit rates for 2022/2023, given to those who work a certain number of hours per week, are as follows (per year):
Basic element: £2,070
Couple and lone parent element: £2,125
30 hour element: £860
Disabled worker element: £3,345
Severe disability element: £1,445
The child tax credit rates are:
Child tax credit family element: £545
Child element: £2,935
Disability element - disabled child rate: £3,545
Disability element - severely disabled child rate: £1,430
How much could I claim on universal credit instead?
Here is how much you will get on universal credit from April 11, when rates increase (per month):
Standard allowance:
Single under 25: £265.31 (from £257.33)
Single 25 or over: £334.91 (from £324.84)
Couple:
Joint claimants both under 25: £416.45 (from £403.93)
Joint claimants, one or both 25 or over: £525.72 (from £509.91)
Depending on your age and whether you would claim as a couple or not, and whether you have children, you might get more money on universal credit. For example, as a single person under 25 you would get £3,183 per year - more than £1,000 more than on working tax credits, which only gives you £2,070.
Why are tax credits being phased out in 2024?
First announced back in 2010 and rolled out three years later, universal credit replaced many of the older legacy payments such as household benefits and income-based jobseeker's allowance, swapping them out for a six-in-one payment. As part of this, tax credits will no longer be available from 2024, with those claiming it put onto universal credit instead.
The DWP said: “The campaign aims to raise awareness that tax credits are ending in 2024 and that many tax credit customers could be financially better off on universal credit.” The DWP is also urging people to “seek independent advice before they apply” for universal credit.
How do I apply for universal credit?
You can apply for universal credit online here. To apply you'll need the following:
- Your bank, building society or credit union account details (call the helpline if you do not have one)
- An email address
- Information about your housing, for example how much rent you pay
- Details of your income, for example payslips
- Details of savings and any investments, like shares or a property that you rent out
- Details of how much you pay for childcare if you’re applying for help with childcare costs
You'll also have to verify your identity online when applying. You’ll need some proof of identity for this, for example your:
- Driving licence
- Passport
- Debit or credit card
If you can't apply online for any reason, you can also contact the universal credit helpline by phone on 0800 328 5644 or 0800 328 1744 (Welsh language). If you cannot hear or speak on the phone, you can use the Relay UK service on 18001 then 0800 328 5644. Lines are open Monday to Friday from 8am to 6pm.
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