Tax Credits Migration Case

Just wanted to double check my reading of the regs on this one.

Have a client who’s been working 16 hours at NMW up until 10/3/24 and claiming CTC and WTC as a single parent - she has now started a 36 hr pw job and will be earning just over 26k p/y.

Based on my reading of the rules as long as she makes a claim for UC before the new Tax Year her transitional element should be based on her current Tax Credit award for 23/24 and the uplift in her wages won’t affect it.

Just wanted to double check this - it’s the first of these sorts of cases that I haven’t been 100% about.

Her transitional element will actually be higher if it is based on the higher income figures. But HMRC won’t have these until she reports it.

My advice in this case would be for her to report ASAP the increased hours to HMRC (to get the 30-hour element). There is no need to report an increased income for 22/23, as it will almost certainly be within £2,500 of last year’s income.

Then, as soon as possible after 6th April, she should contact HMRC and give an estimated income for 24/25 - say around £26,000.
If her income for tax credits isn’t clear - perhaps due to potential future changes, or pension contributions, she should err on the low side - i.e., report lower than £26k rather than higher.

Then wait a few days to make sure it has been processed, and then claim UC.

are pretty much all migration cases not better off waiting now if they can so that their first AP after they claim uc will have the new rates?

Most cases, but not all.

For example, if a DLA MR care award for a child is ending, then probably better to claim before it ends.