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:
- responsible for a child or young person
- living with a disability or health condition that affects your ability to work
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|
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.
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.
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.