Universal Credit recipients 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. This warning stems from the fact that the income threshold for eligibility under Universal Credit is lower than that of Tax Credits.
Renowned financial expert Martin Lewis recently highlighted that many individuals may not realize they are no longer eligible for these benefits and could unknowingly face fines if they improperly attempt to claim them for free. Following the discontinuation of Tax Credits in April 2025, individuals were transferred to Universal Credit, which is administered by the Department for Work and Pensions (DWP).
Under Tax Credits, the earnings limit for free prescriptions and dental care is set at £15,276 before tax and National Insurance contributions. In contrast, individuals on Universal Credit face a lower income threshold of £435 per month, or £935 if their claim includes a child element or component for limited capability for work.
During a recent broadcast of the Martin Lewis Money Show Live on ITV, Lewis emphasized the importance of understanding the differences in income thresholds between Tax Credits and Universal Credit. He cautioned that individuals moving from Tax Credits to Universal Credit should not assume automatic eligibility for free prescriptions and dental care, as the requirements differ. Failure to acknowledge these differences could lead to fines of up to £100 for those who mistakenly claim benefits they are no longer entitled to.
In addition to replacing various benefits such as Income-based Jobseeker’s Allowance, Income Support, Income-related Employment and Support Allowance, and Housing Benefit, Universal Credit brings about changes in how health costs are covered. While there are exceptions allowing continued claims for certain benefits, individuals on Universal Credit must ensure they meet the relevant earnings criteria to qualify for assistance with health costs.
A spokesperson from the Department of Health and Social Care emphasized that despite the variations in benefit rules between Tax Credits and Universal Credit, individuals on Universal Credit should still be able to receive support for health costs if they meet the prescribed earnings thresholds. It is noted that nearly 90% of NHS prescription items and approximately half of NHS dental treatments are provided free of charge to patients.
