More than £5.5m people in the UK are claiming Universal Credit, according to recent statistics. The latest government figures show that more than 2m of these claimants are currently in work.
Universal Credit is a payment to help with the cost of living for those who are on a low income, are unemployed or are unable to work. It was brought in by the government almost 10 years ago to consolidate six existing benefits: child tax credit, housing benefit, income support, jobseeker’s allowance, employment and support allowance and the working tax credit.
You can claim it if you live in Britain, are aged 18 or over, and under the State Pension age. It is paid monthly - or twice a month for some people in Scotland.
Read more: DWP Universal Credit rule change means more workers are eligible for benefit
Will working affect my Universal Credit?
Unless you are entitled to work allowance (see below), then your Universal Credit will be affected as soon as you start earning. Currently, for every £1 you earn, your payment is reduced by 55p.
Last year, this so-called ‘taper rate’ was 63p in every £1. However, the taper rate was lowered to 55 per cent (or 55p in £1) in the Autumn budget.
Am I entitled to the Universal Credit work allowance?
You can however 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 and there are two different rates. The one you receive depends on whether you get help with housing costs.
If you do get help with housing, work allowance is £344 per month. If you don’t, it is £573 per month.
The government gives the following example: “You have a child and get money for housing costs in your Universal Credit payment. You’re working and earn £500 during your assessment period.
“Your work allowance is £344. This means you can earn £344 without any money being deducted. For every £1 of the remaining £156 you get, 55p is taken from your Universal Credit payment. So £156 x £0.55 = £85.80. This means you earn £500 and £85.80 is deducted from your Universal Credit.”
How much do I have to earn before my Universal Credit stops?
When your income increases, the Universal Credit payment continues to be reduced until you’re earning enough to no longer claim it. That amount will depend on your circumstances.
Once your income is high enough, your payment will be stopped. You will be informed when this happens.
If your earnings decrease after this, you can claim Universal Credit again. If your last payment was within six months, you can restart your old claim. If not, you need to make a new claim.
