Universal Credit restrictions: How much can I earn before Universal Credit is reduced?

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Universal Credit is paid to millions of Britons each year, to help with the cost of living for those on low incomes, unable to work or are seeking employment. Universal Credit replaces Child Tax Credit, Housing Benefit, Income Support, income-based Jobseeker’s Allowance (JSA), income-related Employment and Support Allowance (ESA) and Working Tax Credit.

Universal Credit is a lifeline for claimants, helping with a range of daily living costs.

  • You may be able to get Universal Credit if:
  • you’re on a low income or out of work
  • you’re 18 or over (there are some exceptions if you’re 16 to 17)
  • you’re under State Pension age (or your partner is)
  • you and your partner have £16,000 or less in savings between you
  • you live in the UK

You can actually work while being paid Universal Credit, however, the amount you earn can impact your monthly benefit payments.

Read More: Universal Credit: How much can you get from the Flexible Support Fund?

How much can I earn before Universal Credit is reduced?

If you are employed, how much Universal Credit you get will depend on your earnings.

Your Universal Credit payment will reduce gradually as you earn more – for every £1 you earn your payment reduces by 63p.

There is no limit to how many hours you can work.

Use a benefits calculator to see how increasing your hours or starting a new job could affect what you get.

You can earn a certain amount before your Universal Credit is reduced if you or your partner are either:

  • responsible for a child or young person
  • living with a disability or health condition that affects your ability to work

This is called a ‘work allowance’. Your work allowance is lower if you get help with housing costs.

So, if you get help with housing costs your monthly work allowance is £292.

If you do not get help with housing costs your monthly work allowance is £512.

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How to apply for Universal Credit

You have to apply as a couple if you and your partner live together. You do not need to be married.

The Universal Credit team might phone you after you’ve sent your application if they need more information or if you cannot verify your identity online.

You can apply for Universal Credit online and will need to have several items on hand to help you do so.

You will need

  • your bank, building society or credit union account details (call the Universal Credit helpline if you do not have one)
  • an email address
  • information about your housing, for example, how much rent you pay
  • details of your income, for example, payslips
  • details of savings and any investments, like shares or a property that you rent out
  • details of how much you pay for childcare if you’re applying for help with childcare costs

If you do not provide the right information when you apply it might affect when you get paid or how much you get.

You also have to verify your identity online. You’ll need some proof of identity for this, for example, your:

  • driving licence
  • passport
  • debit or credit card

You can visit the Universal Credit application website here to start the process.

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