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Universal Credit (UC) income and capital - Universal Credit (UC): Earnings

Find out more about Universal Credit income and capital.

Universal Credit (UC): Earnings

In working out the effect your net earnings and other income will have on your Universal Credit award there are two important terms: Work Allowance and Taper Rate. Earnings below your work allowance are ignored. Earnings over your work allowance will be subject to a taper of 65%.

Work Allowance

This is 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 and whether your maximum Universal Credit award contains a Housing Costs element.

If your maximum Universal Credit award does contain a Housing Costs element, your work allowance will be the lower work allowance in the table below. If it doesn't, your work allowance will be the higher work allowance.

Work allowances from April 2016

From 11 April 2016, the range of work allowances available have been simplified. You will be eligible for a work allowance if you (and/or your partner) either:

•  have responsibility for a child and/or
•  have an illness of disability that causes you to be unable to work (limited capability for work)
 
The monthly work allowances are set at:

Monthly work allowances
Claimant   Higher Work Allowance Lower Work Allowance
Single Responsible for one or more children or qualifying young persons £397  £192
Single Has limited capability for work £397  £192
Couple Responsible for one or more children or qualifying young persons £397 £192
Couple Has limited capability for work £397 £192

If you are a member of a couple, but have to make a claim as a single person, your work allowance is still the amount for couples.

If you have earnings but you (or your partner) are not responsible for a child or do not have limited capability for work you will not be eligible for a work allowance.

Taper rate

The taper rate is the rate at which your maximum Universal Credit award is reduced as your earnings increase.

A taper rate of 65% means losing 65p of your maximum Universal Credit award for every £1 you earn over your work allowance.

Your earnings will be assessed monthly to ensure your Universal Credit 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.

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