Revealed: How Universal Credit could land households with freshly made debt
By Chaminda Jayanetti
People switching from tax credits to Universal Credit could be hit with new debts due to the move, the Department for Work and Pensions has admitted.
Tax credits are among the benefits being replaced by Universal Credit, but moving people from one benefit to the other is a complex process.
This is because tax credits are paid by HMRC, while Universal Credit is paid by the DWP – a completely different department of government.
In official guidance published last week with little fanfare, the DWP said: “HMRC will continue to make tax credit payments until they receive a stop notice from DWP, which is automatically sent when entitlement for Universal Credit is established.
“The move to Universal Credit could create a tax credit overpayment which the claimant will have to pay back as well as any other tax credit overpayments they may have.”
In other words…
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