To ask the Secretary of State for Work and Pensions, whether tax credit recipients who have more than £16,000 in savings will lose all their support on being migrated to Universal Credit after the one year grace period, or whether they will be entitled to further transitional protection.
26 May 2022
Tax Credit claimants will have any capital they hold above £16,000 disregard for up to 12 months once moved to Universal Credit as part of the managed migration process. This means that the normal rules for the treatment of capital, that would usually prevent them claiming UC, will not be applied during this period.
Normal UC rules for capital will still be applied to the capital they hold between £6,001 and £16,000. If their capital falls to £16,000 or below during the 12 months, then the disregard is not re-applied, should their capital rise above £16,000 again.
After 12 months, the disregard on tax credit claimants’ income that permits them to claim UC if their capital exceeds £16,000 will cease to apply and, like all claimants with capital over £16,000, they will not be entitled to Universal Credit.