Secretary of State is ‘actively looking’ at what can be done for tax credit claimants who have lost entitlement due to applying for universal credit

Dr Coffey adds that she has 'already asked for the website to be updated', so that people are 'crystal clear' when they apply

Secretary of State for Work and Pensions Dr Thérèse Coffey has said she is 'actively looking' at what can be done for tax credit claimants who have lost their entitlement due to applying for universal credit.

During a debate in the House of Commons yesterday - about the DWP's response to the coronavirus (COVID-19) pandemic - a question was raised by Conservative MP Owen Paterson about tax credit claimants who have been encouraged by the government to claim universal credit without realising that doing so would cause their entitlement to tax credits to cease. While rejecting requests to introduce a number of other measures to support those still struggling as a result of COVID-19 - including suspending the benefit cap and two child policy, and raising legacy benefits in line with universal credit - the Secretary of State said in response to Mr Paterson that - 

'I am very aware of the issue he is ​bringing to my attention, and I am actively looking at that particular scenario, where people, not realising some of the eligibility rules, have then made the application and are no longer effectively going to receive working tax credits.

I cannot give an answer to my right hon. Friend or the House today, but I assure him that I am looking very carefully into what changes we could make to address that situation. I have already asked for the website to be updated, so that people are crystal clear when they apply.'

NB - on 24 April 2020, the Work and Pensions Committee published findings from its survey into people’s experiences of the benefits system during the coronavirus outbreak including that 'people who were already claiming working tax credits told us that it hadn’t been made clear to them that making a claim for universal credit would automatically stop their existing benefits.'

Elsewhere in the Commons debate, Dr Coffey -

• agreed to consider the differing treatment of maternity allowance and statutory maternity pay under the universal credit regulations, where the former is treated as unearned income which is deducted pound for pound, whereas the latter is treated as earned income and is subject to work allowances (where applicable) and the taper; and
• announced that no new benefit or pension claimants will be able to use the Post Office card account to receive their money with effect from 11 May 2020 (although existing customers will see no change).

For more information, see COVID-19: DWP update from Hansard.