DWP warns state pensioners may face council tax increase in weeks

Tax Credit claimants over state pension age - currently 66 - are due to receive a letter before the end of the current financial year about their move to Universal Credit or Pension Credit.

The Department for Work and Pensions said: "Those who are currently eligible for pension-age Council Tax Reduction but who move to Universal Credit have the potential to see their council tax bills rise."

"This is because the Council Tax Reduction Schemes Regulations 2012 specifically exclude people who receive Universal Credit from receiving pension age council tax reduction."

Instead, those affected would have to apply for a local council working age scheme which "may provide a smaller reduction".

Local councils are being urged to make adjustments to help potentially thousands of pensioners who are set to face higher bills from next month due to a change to benefits being made by the DWP.

The DWP added: "The number of affected pensioners is likely to be small and limited to those who have applied for council tax reduction, are self-employed and earning a very low income, and those who have deferred their state pension."

There are six legacy benefits: income-based jobseekers allowance, income-related employment and support allowance, income support, housing benefit, child tax credit and working tax credit.

Households on these six benefits will be moved onto Universal Credit. But as part of the process, the DWP has warned: "The Tax Credit system is due to close in April 2025.

"As part of that closure programme, its remaining pension age tax credit recipients will receive a notice asking them to either move to Pension Credit (notices being issued from July 2024 onwards) or Universal Credit (notices being issued from September 2024 onwards) depending on their circumstances."

People who receive a Migration Notice or Closure Notice may be eligible for additional funds to offset any loss in benefits following the termination of their Tax Credit claims, known as a transitional additional amount.

However, a point of law will see many state pensioners hit with increased council tax bills from September 1.

Council Tax Reduction (also known as Council Tax Support) is a benefit to help people who are on a low income or claiming certain benefits to pay their Council Tax bill.

Age UK explains: "You can make a claim whether you own your home or you're renting, and your employment status won't have an impact on your claim."

State pensioners claiming tax credits have been warned that their letters should arrive this month so they should make sure they do not miss it.

Once the letter from DWP has been received, Britons are given three months to make their claim, with the option to extend the deadline if needed.

However, many are believed to have missed this deadline, which could leave hundreds of thousands without essential support.