Income and Capital
In working out your Universal Credit
award, firstly your maximum award is calculated, then if you
have any earnings, other income, capital or savings, these are
taken into account to work out your actual Universal Credit
Earnings and other income
In working out the effect your net earnings and other income
will have on your UC award there are two important
terms: Work Allowance and Taper Rate.
Work Allowance: The amount of money
that you can earn before your maximum Universal
Credit award starts to be reduced.
Your work allowance is based on your needs so,
for example, a couple with children have a higher disregard
than a couple without children.
See our Work Allowance rates page to
find out your work allowance.
Earnings below your work allowance are ignored. Earnings
over your work allowance will be subject to a taper of
Taper Rate: The rate at which your maximum
Universal Credit award is reduced as your earnings
A taper rate of 65% means losing 65p of your maximum
Universal Credit award for every £1 you earn over your work
Your earnings will be assessed monthly to ensure your UC award
is always accurate. The assessment period begins with the first
date of entitlement and will then run from the same date each
month during your award.
Most unearned income which you could use to meet your
living costs will be taken into account in full, so your maximum
Universal Credit award will be reduced by £1 for every £1 of
Benefit income taken into account:
- Jobseeker's Allowance (contributory)
- Employment and Support Allowance
- Carer's Allowance
- Bereavement Allowance
- Widowed mother's allowance
- Widowed parent's allowance
- Widow's pension
- Maternity Allowance
- Industrial Injuries Benefit - excluding any increase where
constant attendance is needed and for exceptionally severe
Any capital/savings you have under £6,000 is ignored.
Any capital/savings you have between £6,000 and £16,000 is
treated as if it gives you a monthly income of £4.35 for each £250,
or part of £250, regardless of whether it does or not.
Example: If you have £6,300 in a savings
account, £6,000 of it will be ignored and the other £300 will
be treated as giving you a monthly income of £8.70.
If you have capital / savings over £16,000 as a single claimant
or as a couple you will not be entitled to Universal Credit.
If you are a member of a couple but have to make a claim as a
single person, your partner's capital / savings will still be
included in your £16,000 maximum.
Last updated: 1 April 2013