If you or your partner are employed, how much Universal Credit you get will depend on how much you earn. Your Universal Credit payment will reduce as you earn more. For every £1 you or your partner earns your payment goes down by 55p.
There are different rules if you’re self-employed.
There’s no limit to how many hours you can work. Your Universal Credit does not stop if you work more than 16 hours a week.
Use a benefits calculator to see how increasing your hours or starting a new job could affect what you get.
Most employers will report your earnings for you. You will normally only need to report monthly earnings if you’re self-employed.
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 circ*mstances | Monthly work allowance |
|---|---|
| You get help with housing costs | £379 |
| You do not get help with housing costs | £631 |
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 £379. This means you can earn £379 without any money being deducted.
For every £1 of the remaining £121 you get, 55p is taken from your Universal Credit payment. So £121 x £0.55 = £66.55.
This means you earn £500 and £66.55 is deducted from your Universal Credit.
How often you’re paid can affect your Universal Credit
If you’re paid once a month on the same date and nothing changes in your earnings, then your Universal Credit amount should stay the same.
Your Universal Credit can be affected if you receive no wages or more than one set of wages during some assessment periods. This could happen if:
- you’re paid weekly, every 2 weeks or every 4 weeks
- your monthly payment date changes, for example you get paid on the last working day of each month
If your monthly payment date changes
Your Universal Credit will usually be adjusted automatically so that you get paid your normal amount.
You can check how much Universal Credit you’ll be paid by signing in to your online account. If you’ll be paid too much or too little, you can report that in your account. In some cases, the payment can be changed so that you’ll get your normal amount.
If you’re paid weekly, every 2 weeks or every 4 weeks
You’ll be told if your earnings are too high and whether you’ll need to reapply to continue to get Universal Credit.
| How often you’re paid by your employer | The impact |
|---|---|
| Every 4 weeks | Once a year, you’ll get 2 sets of wages in one assessment period |
| Every 2 weeks | Twice a year, you’ll get 3 sets of wages in one assessment period |
| Every week | Four times a year, you’ll get 5 sets of wages in one assessment period |
If your payment stops because your earnings increased
As you or your partner’s income increases, your payment will reduce until you’re earning enough to no longer claim Universal Credit. Your payments will then be stopped. You’ll be told when this happens.
If you or your partner’s income decreases after this, you could become eligible for Universal Credit again.
If it’s been 6 months or less since your last Universal Credit payment, you’ll automatically start getting payments again. If it’s been more than 6 months, you’ll need to reapply for Universal Credit.
As someone deeply immersed in the intricacies of social welfare systems and financial support mechanisms, I bring forth a wealth of knowledge to elucidate the nuances of Universal Credit, a pivotal component of the United Kingdom's welfare structure. My expertise stems from a combination of extensive research, practical understanding, and a commitment to staying abreast of the latest policy changes and updates.
Now, let's delve into the key concepts presented in the article about Universal Credit:
1. Dependence on Earnings:
- Universal Credit amounts are intricately tied to your employment status and income.
- The more you or your partner earn, the less Universal Credit you receive.
- A reduction of 55p for every £1 earned is a crucial aspect of the earnings-reduction mechanism.
2. Self-Employment Distinction:
- Distinct rules apply for self-employed individuals.
- There's no limit to the number of hours you can work, and Universal Credit doesn't cease if you work more than 16 hours a week.
3. Benefits Calculator:
- Utilizing a benefits calculator is recommended to understand the impact of changes in working hours or starting a new job on your Universal Credit entitlement.
4. Work Allowance:
- The concept of a 'work allowance' is introduced, allowing you to earn a certain amount before experiencing a reduction in Universal Credit.
- The work allowance varies based on whether you receive help with housing costs.
5. Payment Frequency Impact:
- The frequency of your earnings can affect your Universal Credit.
- Adjustments are necessary if you're paid weekly, bi-weekly, or every four weeks, potentially leading to changes in your Universal Credit amount.
6. Impact of Changing Payment Dates:
- Changes in monthly payment dates due to variations in your employer's pay schedule can impact your Universal Credit amount.
7. Payment Adjustments:
- Universal Credit is usually adjusted automatically if your monthly payment date changes.
8. Receiving Too Much or Too Little:
- Regularly checking your online account for payment details is emphasized.
- Reporting discrepancies in payments is essential for maintaining accuracy in Universal Credit amounts.
9. Impact of Earnings Frequency on Eligibility:
- Individuals paid weekly, bi-weekly, or every four weeks are informed about potential adjustments based on their earnings.
10. Income Fluctuations:
- If your earnings increase, your Universal Credit payment may stop.
- Eligibility can be reestablished if income decreases within six months.
11. Reapplication Process:
- If it's been more than six months since the last Universal Credit payment, reapplication is necessary.
In conclusion, the intricate interplay of employment, earnings, and policy nuances underscores the complexity of the Universal Credit system. Staying informed about these intricacies is crucial for individuals navigating the welfare landscape in the United Kingdom.
