New to Universal Credit

7. Universal Credit and work

You may still be able to receive Universal Credit payments when you start work or increase your earnings. You will continue to receive Universal Credit payments until you are earning enough to no longer get them. That amount will depend on your circumstances.

If your job ends and you are already getting Universal Credit, your next Universal Credit payment will be paid as normal.

How earnings affect your payments

Your Universal Credit payments will adjust automatically if your earnings change. It doesn’t matter how many hours you work, it’s the actual earnings you receive that count.

If your circumstances mean that you don’t have a Work Allowance, your Universal Credit payment will be reduced by 63p for every £1 you earn.

Work Allowance

If you and/or your partner are in paid work you may be able to earn a certain amount before your Universal Credit payment starts to be affected. This is called a Work Allowance.

The Work Allowance only applies to you if:

  • you have responsibility for one or more children (or qualifying young persons), or
  • you or your partner have limited capability for work (a health condition or disability)

If neither of these circumstances apply to you, your Universal Credit payments will be affected as soon as you start earning money from paid work.

There are 2 Work Allowance rates. Which one you get depends on whether your Universal Credit payment includes help with housing costs:

  • If you receive money to help with housing costs your Work Allowance will be £198 per month
  • If you do not receive money to help with housing costs your Work Allowance will be £409 per month

Graphic showing how a claimant's situation affects their Work Allowance

Read more about Universal Credit Work Allowances

If you earn more than your Work Allowance

If you earn more than your Work Allowance, your Universal Credit payment will be reduced. For every £1 you earn above your Work Allowance, your Universal Credit payment will be reduced by 63p. This means that your total income from earnings and Universal Credit will be more than you would have received from Universal Credit alone.

If your circumstances mean that you don’t have a Work Allowance, your Universal Credit payment will be reduced by 63p for every £1 you earn.

If you are part of a couple and receive a joint Universal Credit payment, both your earnings will be used to calculate how much Universal Credit you get.

How often you’re paid

Universal Credit payments are made every calendar month, but if you’re working your earnings may be paid weekly, fortnightly or every 4 weeks.

This will mean that every now and again you will get more payments from work than is usual during a calendar month.

For example, if you are paid every 2 weeks, you will usually get 2 payments from earnings in a month. But because calendar months are mostly longer than 4 weeks, sometimes you will get 3 payments from earnings in a single month.

In these months your earnings will be higher than usual, and this will mean that you get a smaller Universal Credit payment. You will need to make sure that you have managed your money to be able to cope with this smaller payment. It may be the case that your extra payment means that you earn enough that month to receive no Universal Credit payment at all.

If a smaller payment means you are having trouble paying your bills and household expenses, speak to your work coach or call the helpline to talk about the help that may be available.

For more details about this and other payment patterns see different earning patterns and your payments

If you receive no Universal Credit payment because of extra earnings

If you manage your Universal Credit account online and receive no Universal Credit payment in a month, your Universal Credit claim will be paused.

If this is because you received an extra earnings payment that month, you can log into your online account and restart your claim. In most cases you will just need to confirm that the details you gave before are correct. If this is done more than 6 months after your last Universal Credit payment you will need to make a new claim.

If you don’t have an online Universal Credit account you won’t need to do anything. You will automatically start receiving Universal Credit payments when your earnings go back to normal.

Surplus earnings

If you have an online Universal Credit account, your earnings from previous months may affect how much you get.

If you earn more than £2,500 over the amount you can earn before your claim is paused, you are said to have surplus earnings. When you restart your claim, these surplus earnings will be taken into account. This may reduce the amount of Universal Credit you receive, or perhaps mean that you can’t get any Universal Credit payment that month.

It’s important that you make a Universal Credit claim even if you think you won’t be able to receive a payment because of surplus earnings from a previous month. Making the claim will reduce the amount of surplus earnings that is taken into account for later months. If you don’t make a claim, the amount of surplus earnings that is taken into account will stay the same. Surplus earnings will stop being taken into account 6 months after they were received.

If you are part of a couple that has surplus earnings and you separate, the surplus earnings will be divided equally between the two of you. Your half will usually be taken into account if you make an individual Universal Credit claim.

Closing your claim

If you are earning enough to not receive any Universal Credit payments for 6 months in a row, your claim will close. If your situation changes after that and you need to claim Universal Credit again, you will need to make a new claim.