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 63%.
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.
Do I qualify for a Work Allowance?
You can get a Work Allowance if you (and/or your partner) either:
• have responsibility for a child and/or
• have a limited capability for work due to illness or disability.
The monthly Work Allowances are set at:
| Claimant |
Higher Work Allowance (no housing costs) |
Lower Work Allowance (housing costs) |
| Single |
Responsible for one or more children or qualifying young persons |
£515 |
£293 |
| Single |
Has limited capability for work |
£515 |
£293 |
| Couple |
Responsible for one or more children or qualifying young persons |
£515 |
£293 |
| Couple |
Has limited capability for work |
£515 |
£293 |
If your maximum Universal Credit award contains a Housing Costs element, your Work Allowance will be the lower Work Allowance in the table above. If it doesn't, your work allowance will be the higher Work Allowance.
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 63% means losing 63p 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.
Updated: April 2021