How your earnings affect your payments

If you’re employed, how much Universal Credit you get will depend on your earnings. Your Universal Credit payment will reduce gradually as you earn more - for every £1 you earn your payment reduces by 63p.

There’s no limit to how many hours you can work.

Use a benefits calculator to see how increasing your hours or starting a new job could affect what you get.

The work allowance

You can earn a certain amount before your Universal Credit is reduced if you or your partner are either:

This is called a ‘work allowance’. Your work allowance is lower if you get help with housing costs.

Your circumstances Monthly work allowance
You get help with housing costs £292
You do not get help with housing costs £512

Example

You have a child and get money for housing costs in your Universal Credit payment. You’re working and earn £500 during your assessment period.

Your work allowance is £292. This means you can earn £292 without any money being deducted.

For every £1 of the remaining £208 you get, 63p is taken from your Universal Credit payment. So £208 x £0.63 = £131.04.

This means you earn £500 and £131.04 is deducted from your Universal Credit.

If your employer has put you on temporary leave (‘furlough’)

If you’re on furlough because your employer has no work for you, you can get up to 80% of your wages paid through the Coronavirus Job Retention Scheme, up to a monthly limit of £2,500. Your employer takes care of this.

You can check if your employer can use the scheme.

If your payment stops because your earnings increased

As your income increases, your payment will reduce until you’re earning enough to no longer claim Universal Credit. Your payment will then be stopped. You’ll be told when this happens.

If your earnings decrease after this, you can claim Universal Credit again.

If you received your last payment 6 months ago or less, you can restart your old claim by signing in to your Universal Credit account. You’ll need to report any changes in your circumstances. If you’re eligible for Universal Credit, your payments will restart with the same monthly assessment period you had previously.

If you received your last payment more than 6 months ago, you’ll need to make a new claim for Universal Credit. You can make a new claim by signing in to your Universal Credit account. You will not be paid on the same date as your previous claim. It usually takes around 5 weeks to get your first payment.

Surplus earnings

If your monthly earnings are more than £2,500 over the amount where your payment stopped, this becomes ‘surplus earnings’.

Your surplus earnings will be carried forward to the following month, where they count towards your earnings. If your earnings (including your surplus earnings) are then still over the amount where your payment stops, you will not get a Universal Credit payment.

If your earnings fall below the amount where your payment stopped, your surplus will decrease. Once your surplus has gone, you’ll be able to get a Universal Credit payment again.

You’ll need to reclaim Universal Credit every month until your earnings have reduced enough to get another payment.

You can talk to your work coach for more information about surplus earnings.

The statement in your online journal will show your work allowance and when the surplus reduces.

If you separate from your partner

If you’re part of a couple that claims Universal Credit together, any surplus earnings will be divided equally between you if you separate.

You’ll then need to re-apply individually, with your part of the surplus earnings counting towards your earnings.

If you’re a victim of domestic abuse you do not take on any surplus earnings from your partner. Talk to your work coach to make sure your partner’s surplus earnings are not divided between you.

If you’re self-employed

You can carry over a loss (as well as a surplus) to the following month. A loss will be deducted from your next month’s earnings.

  1. Step 1 Check if you're eligible

  2. Step 2 Create an account and make a claim

    You need an online account to claim Universal Credit.

    1. Set up an account and make a claim

    You must submit your claim within 28 days of creating your account.

    If you live with your partner, they will also need to set up an account. You'll be given a code to link the accounts together.

  3. and Find out how your claim is assessed

    You'll need to have an interview with Jobcentre Plus. You'll be told how to arrange this after you submit your claim. It will be within 10 working days.

    If you have a disability or health condition you may need a work capability assessment. You'll be told if you need one after you claim.

    1. What to do if you have a health condition or disability
  4. Step 3 Apply for an advance on your first payment

    If you need help with bills or other costs while you wait for your first payment, you can apply to get an advance.

    1. Get an advance on your first Universal Credit payment
    2. Check if you can get any other financial support
  5. Step 4 Get your first payment

    You’ll get your first payment 5 weeks after you claim. Your account will be updated to tell you how much it will be.

    1. What to do if you disagree with the decision
  6. Step 5 Report any change of circumstances

    You must update your account if your circumstances change to get the right payment.

    1. How to report a change in circumstances
    2. What to do if your payments are stopped