Universal Credit recipients previously receiving Tax Credits have been cautioned about the potential risk of a £100 penalty if they no longer meet the criteria for complimentary NHS prescriptions and dental care. The income threshold for eligibility is lower under Universal Credit than it was under Tax Credits.
Financial expert Martin Lewis recently highlighted the possibility of individuals unknowingly losing eligibility and facing fines if they incorrectly attempt to claim free benefits. Tax Credits were phased out in April 2025, transitioning people to Universal Credit administered by the Department for Work and Pensions (DWP).
Under Tax Credits, the income limit for free prescriptions and dental treatment is set at £15,276 annually before deductions. Conversely, for Universal Credit claimants, the threshold is significantly lower, standing at £435 per month or £935 if the claim includes specific elements. This equates to approximately £5,220 or £11,220 annually.
Martin Lewis emphasized during a recent ITV broadcast that there is a critical distinction between the income thresholds for benefits under Tax Credits and Universal Credit. He warned about the common mistake of individuals selecting outdated benefit options when seeking healthcare services, leading to potential fines of up to £100 for inadvertent inaccuracies.
Universal Credit is gradually replacing various benefits like Income-based Jobseeker’s Allowance, Income Support, Employment and Support Allowance, and Housing Benefit. While many benefits are streamlined under Universal Credit, exceptions exist for certain circumstances, such as continued eligibility for Housing Benefit in supported or temporary housing situations.
According to the Department of Health and Social Care, individuals on Universal Credit should still be entitled to health cost assistance if they meet the requisite income criteria. They noted that a significant portion of NHS services are provided free of charge to patients, with nearly 90% of prescription items and around half of dental treatments falling into this category.