Universal Credit UK: How earnings will affect your payments – could they be reduced? | Personal Finance | Finance
Universal Credit payments are typically made up of a standard allowance with extra amounts added onto it. These additional elements are based on certain living situations such as if the claimant has children, a disability or needs help with housing costs.
The Universal Credit payment will gradually reduce the more the claimant earns.
For every £1 earned, the payment will reduce by 63p.
A claimant can earn a certain amount before their Universal Credit is reduced if they or their partner are either:
- Responsible for a child or young person
- Living with a disability or health condition that affects their ability to work
This is known as the work allowance, which in itself will be lower if the claimant gets help with housing costs.
If the claimant gets support for housing costs, their monthly work allowance will be £292.
This will increase to £512 if they do not get housing support.
Universal Credit is designed to encourage people to get into work where they can and so as the claimant’s income increases, their payment will reduce until they’re earning enough to no longer need state support.
If earnings decrease after this, the person involved will be able to claim Universal Credit again.
In order to be eligible for Universal Credit at all, a person must be at least 18 years of age – although there are some exceptions for those aged 16 to 17.
They must also be below state pension age and live in the UK.
Universal Credit payments will usually be paid once a month into a designated bank, building society or credit union account.
It will take around five weeks for an initial payment to come through but an advance can be requested if income is needed instantly. That said, it’s important to note that this advance must be paid back – starting out of the first payment and currently within 12 months.
After the first payment, the claimant will be paid on the same date of every month.