Published On: Thu, Aug 29th, 2019

What is Universal Credit work allowance? How much you can earn before claim amount reduces | Personal Finance | Finance

Universal Credit is a payment which can help with living costs, and is replacing six types of benefits, known as legacy benefits. It is made up of a monthly standard allowance, which depends on age and whether the applicant is a single person or a couple. Some people may be able to get extra payments – such as if they’ve got children or are living with a disability. It is possible for some people who can work to do so while claiming Universal Credit – although the payments can gradually reduce.

For those who are employed, the amount that they get will depend on earnings. explains that for every £1 earned, the payment reduces by 63 pence.

There is no limit as to how many hours a person can work.

It’s possible to use a benefits calculator – available online at websites such as Policy in Practice, entitledto, and Turn2us – to see how increasing one’s hours or starting a new job would affect a person’s Universal Credit payment amount.

Should a person or their partner be responsible for a child or young person, or live with a disability of health condition that affects their ability to work, it’s possible to earn a certain amount before the Universal Credit payment is reduced.

This is known as the work allowance.

The work allowance is lower if the claimant gets help with housing costs.

For these people, the monthly work allowance is £287.

People who do not get help with housing costs get a monthly work allowance of £503.

If income increases, the payment will reduce until the claimant is earning enough to no longer claim Universal Credit.

The payment will then stop, and states that these people will be told when this happens.

If one’s earnings decrease after this, and the individual wants to restart the Universal Credit payment, they’ll need to make a new Universal Credit claim online.

Should a person’s monthly earnings be more than £2,500 over the amount where the payment stopped, this becomes known as “surplus earnings”.

These are then carried forward to the following month, counting towards one’s earnings.

If the earnings, including “surplus earnings” are then still over the amount where the payment stops, the Universal Credit payment will not be made.

Should earnings fall below the amount where the payment stopped, the surplus will decrease. explains that once this surplus amount has gone, it’s possible to get the Universal Credit payment once again.

The government website states that these individuals will need to reclaim Universal Credit every month until their earnings have reduced enough to get another payment.

READ MORE: What Universal Credit am I entitled to? How to work out how much you could claim per month

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