How much can I earn before Universal Credit is cut?

HOUSEHOLDS can get thousands of pounds in the form of Universal Credit – but your entitlement is reduced as you start earning.

The government benefit is paid once or twice a month and is intended to help with living costs.

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But it is also intended to get people back to work, so it is reduced if you start receiving a salary.

However, there are some households who can earn up to a certain amount before their Universal Credit is reduced.

Here you will find everything you need to know about the “phase-out rate” and the “work allowance”.

Can I work while claiming Universal Credit?

You can work if you claim Universal Credit, but the payments are designed to reduce as you earn more.

That's because it's supposed to support those who want to get back to work but may not be able to for a number of reasons.

So you can work while claiming Universal Credit, but the more hours you work and the more wages you take home, the more your payments will be reduced.

How much can I earn before Universal Credit is cut?

For every £1 you earn, your Universal Credit payments are reduced by 55p – this is known as the taper rate.

However, some people qualify for what's called a “work allowance,” where deductions are only made if you earn more than a certain amount.

You will receive a work allowance if you (or your partner) are responsible for a child or have a 'limited work capacity'.

Limited employment opportunity exists when you may not be able to look for work at the moment, but you still need to take steps to find work.

The Universal Credit work allowance is lower if you also get help with housing costs.

The monthly work allowances are:

• £379 if you get help with housing costs
• £631 if you don't get help with housing costs

How much you earn and whether you are entitled to Universal Credit payments depends on your circumstances.

The total amount of benefits you can receive is capped at £25,323 per year for couples and single parents living in Greater London.

Meanwhile, it is £22,020 a year for people in the same circumstances but living outside Greater London.

Single adults in Greater London can receive up to £16,967 a year and £14,753 outside Greater London.

How many hours can I work with Universal Credit?

There is no limit to the number of hours you can work.

Universal Credit payments are calculated based on how much you earn, not your working hours.

You can use a benefits calculator to see how taking on extra hours could affect your payments.

The way you get paid can also affect your Universal Credit payments.

They are based on how much you earn in each monthly “assessment period.”

If you are paid more than once per assessment period, this may reduce your benefit.

For example, if you are paid every four weeks instead of monthly, you may have a month where two salaries fall into one review period.

Because you have earned more towards Universal Credit assessment, your entitlement may be reduced.

If this happens, you can ask your work coach to move the pay to another assessment period.

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