Universal Credit payments can be affected by how much you work

Universal Credit supports people on low incomes and although a person can work while on the benefit, how much they work may affect their payments.

A person or couple’s Universal Credit entitlement can vary depending on several factors, including how much the claimant works.

Claimants get a standard allowance and in some cases, additional payment to go towards other costs.

Universal Credit payments recently increased 10.1 percent, with the standard allowance at:

  • Single under 25: £292.11 per month
  • Single 25 or over: £368.74 per month
  • Joint claimants both under 25: £458.51 per month
  • Joint claimants, one or both 25 or over: £578.82 per month.

How will my Universal Credit claim be affected if I work?

Some claimants can get a work allowance, which is a set amount they can earn before their claim is reduced.

People usually only get this if they have responsibility for the upkeep of a child or if they have a disability or health condition that affects their ability to work.

This is the current work allowance :

  • £379 a month – if the claimant gets help with housing costs
  • £631 a month – if the claimant doesn’t get help with housing costs.

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For claimants who do not have the allowance or for earnings above the allowance, a taper rate applies to their Universal Credit payment.

The taper rate is set at 55 percent which means 55p is deducted from a person’s maximum Universal Credit payment for every £1 they earn.

This would mean for a single person under the age of 25 with no other claims, their standard allowance would be £292.11 a month.

If they were not eligible for the work allowance and received £200 in income from work each month, their payment would go down by £110.

This would mean they would get £182.11 a month in Universal Credit in addition to their £200 wages, so they would have an income of £382.11 a month.

People on Universal Credit are eligible for a £900 cost of living payment going out to certain people on means-tested benefits.

The first instalment of £301 has now gone out to most people who are eligible to get the funds.

The second instalment is due to go out in autumn 2023 with the third instalment going out in spring 2024.

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