Claimants of Universal Credit who have transitioned from Tax Credits are being cautioned about the possibility of incurring a £100 penalty if they no longer meet the requirements for free NHS prescriptions and dental care.
The warning stems from the fact that the income threshold for eligibility for these benefits is lower under Universal Credit compared to Tax Credits.
Renowned financial expert Martin Lewis recently highlighted that individuals might not realize they are no longer qualified for these benefits and could mistakenly attempt to claim them for free, leading to potential fines.
Tax Credits ceased in April 2025, with individuals transitioning to Universal Credit, which is administered by the Department for Work and Pensions (DWP).
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The income threshold for qualifying for free prescriptions and dental care under Tax Credits is set at £15,276 annually before tax and National Insurance contributions, according to MoneySavingExpert.com.
On the other hand, for Universal Credit recipients, the threshold is lower at £435 monthly or £935 monthly if the claim includes elements for children or limited capability for work, equivalent to around £5,220 or £11,220 annually.
During a recent episode of the Martin Lewis Money Show Live on ITV, Martin cautioned individuals moving from Tax Credits to Universal Credit not to assume they automatically qualify for free prescriptions and dental care due to the lower income threshold under Universal Credit, which is assessed monthly as opposed to annually under Tax Credits.
He emphasized the risk of incurring fines of up to £100 for those mistakenly claiming these benefits, unaware of the differing income thresholds.
Universal Credit is also replacing other benefits such as Income-based Jobseeker’s Allowance, Income Support, Income-related Employment and Support Allowance, and Housing Benefit, although exceptions exist for certain circumstances like supported or temporary accommodation.
A spokesperson from the Department of Health and Social Care assured that individuals on Universal Credit remain entitled to health cost assistance if they meet the required earnings criteria, with nearly 90% of NHS prescription items and half of NHS dental treatments being provided free of charge to patients.
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