Claimants of Universal Credit who have transitioned from Tax Credits have been cautioned about the possibility of incurring a £100 penalty if they no longer meet the criteria for free NHS prescriptions and dental care.

The warning stems from the fact that the income threshold for eligibility is lower under Universal Credit compared to Tax Credits.

Financial expert Martin Lewis recently highlighted that individuals may not realize they are no longer entitled to these benefits and could face fines if they mistakenly attempt to claim them for free.

Tax Credits ceased in April 2025, leading to the transition of individuals to Universal Credit, administered by the Department for Work and Pensions (DWP).

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Under Tax Credits, the income threshold for free prescriptions and dental care is £15,276 before deductions for tax and National Insurance contributions.

According to MoneySavingExpert.com, this translates to approximately £1,210 per month or £14,520 annually after tax and National Insurance deductions.

However, for Universal Credit recipients, the threshold is £435 monthly, or £935 if the claim includes a child element or component for limited capability for work. This corresponds to around £5,220 or £11,220 annually, as per MSE calculations.

During his recent Money Show Live broadcast on ITV, Martin Lewis cautioned against assuming free prescriptions and dental care entitlement when moving from Tax Credits to Universal Credit in England.

Lewis noted that the income threshold for these benefits is lower under Universal Credit compared to Tax Credits, and the assessment intervals differ, potentially leading to misunderstandings.

He highlighted instances where individuals unknowingly select the Tax Credits, Jobseeker’s Allowance, or Universal Credit options when claiming free services, leading to potential fines due to differing income thresholds.

Universal Credit is gradually replacing various benefits, including Income-based Jobseeker’s Allowance, Income Support, Income-related Employment and Support Allowance, and Housing Benefit, although exceptions may apply in certain circumstances.

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