Universal Credit and earnings

How your earnings affect your payments

If you or your partner are working, how much Universal Credit you get will depend on how much you earn each month. These are called your ‘assessment periods’.

You can check how much Universal Credit you will get each month in the statement in your online account.

Your Universal Credit payment will reduce as your wages go up, and increase again if you stop working or your wages go down.

For every £1 you or your partner earns your payment goes down by 55p. This amount will be automatically deducted from your Universal Credit payment.

See how your wages affect your payments.

There are different rules if you’re self-employed.

The amount of Universal Credit you get can be affected if you:

• are responsible for a child or have a health condition
• do not get paid in an assessment period
• get paid more than once in an assessment period
• earn a different amount each assessment period

If you’re responsible for a child or have a health condition

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 amount is called a ‘work allowance’.

If you do not get paid or get paid more than once in an assessment period

Your Universal Credit can be affected if you do not get paid or get paid more than once in an assessment period. This could happen if:

• you’re paid monthly and your monthly payday changes
• you’re paid weekly, every 2 weeks or every 4 weeks

If you’re paid monthly and your payday changes

If you’re paid monthly and your payday changes, for example to avoid a weekend, your Universal Credit will usually be adjusted automatically so that you get your usual amount.

If it looks like you’ll get too much or too little Universal Credit, tell us in your online account. In some circumstances Universal Credit can be adjusted so that you get your usual amount.

If you’re paid weekly, every 2 weeks or every 4 weeks

Your Universal Credit may be affected if you have more paydays than usual during an assessment period.

How often your payday is	The impact
Every 4 weeks	Once a year, you’ll have an assessment period with 2 paydays
Every 2 weeks	Twice a year, you’ll have an assessment period with 3 paydays
Every week	Four times a year, you’ll have an assessment period with 5 paydays

When you get more wages than usual in an assessment period you may get:

• less Universal Credit for that month
• no Universal Credit, because you’re earning enough to no longer claim it

If you earn a different amount each assessment period

For each assessment period your Universal Credit is adjusted to take your wages into account.

If you earn less in an assessment period, your Universal Credit will usually increase.

If you earn more, your Universal Credit will usually reduce.

If the amount you earn in an assessment period rises above a certain amount, your Universal Credit will stop. This is because you’ve reached the limit you can earn and still be entitled to Universal Credit. The amount is based on your individual circumstances.

If you earn £2,500 or more over your earnings limit

If you earn £2,500 or more over your limit then:

• you will get no Universal Credit
• the amount over £2,500 will be carried over and counted as earnings in the next assessment period
• you are said to have ‘surplus earnings’

This could happen if you’re self-employed or get a bonus, for example.

You will not get any Universal Credit until your earnings, including the amount that’s carried over, go under the limit and you become entitled to Universal Credit again.

If your wages reduce enough for you to be eligible for Universal Credit within 5 months, your Universal Credit payment will be automatically restarted. If it’s after 5 months you will need to apply again.

If you were in a couple who then separated, any surplus earnings will be divided equally between the 2 of you. Your half will be taken into account if you make a new single or joint Universal Credit claim.

If you pay into a private pension scheme

Your private pension contributions can reduce the amount of income that is considered when assessing your Universal Credit award. This could mean you get a higher Universal Credit payment.

A workplace pension run by your employer should already be taken into account, as Universal Credit is based on your net take-home pay.

Personal pension schemes not run by your employer

If you pay into to a registered personal pension scheme not run by your employer, each assessment period you’ll need to:

• tell us how much you paid in to the scheme during the monthly reporting period. This is the actual amount you paid into the scheme, not including the tax relief you received
• provide evidence of your pension payment

How you tell us about personal pension contributions depends on whether you’re self-employed:

• if you’re self-employed, tell us when you report your self-employed income and expenses using your online Universal Credit account
• if you’re not self-employed, tell us using your journal in your online Universal Credit account

Sign into your Universal Credit online account.

If you’re not able to tell us about your personal pension contributions online, you’ll need to contact Universal Credit.

Earnings and your responsibilities

When you claim Universal Credit you agree what you need to do to:

• prepare for and look for work
• increase your earnings, if you’re already working

Details of what you must do in return for Universal Credit are in your ‘claimant commitment’.

The ’Administrative Earnings Threshold’ (AET)

The AET is an amount you can earn that affects what you’re asked to agree to.

For individual claimants, the AET is £892 per assessment period.

Additionally, if you’re in a couple, the combined couple’s AET is £1,437 per assessment period.

If you earn below the AET

If you as an individual earn below the AET in an assessment period, you must:

• show you’re actively looking for more, or better-paid work
• be available for work

unless you’re part of a couple whose combined earnings are at, or above, the couple’s AET.

If you’re part of a couple whose individual earnings are below the individual AET, and whose combined earnings are below the couple’s AET, both of you must:  

• show you’re actively looking for more, or better-paid work
• be available for work

You will also get regular personalised support from a ‘work coach’. Your work coach can help you with job search strategies, interview skills and connecting with employers.

If you earn above the AET

If you earn the individual AET or more, you do not need to actively look for more or better paid work.

Additionally, if you’re in a couple, and your combined earnings are equal to or higher than the couple’s AET, you or your partner do not need to actively look for more or better-paid work.

The Conditionality Earnings Threshold (CET)  

The CET is an amount that’s based on the number of hours you can reasonably be expected to work or do work-related activities. It is based on your circumstances.

If you earn between the AET and your CET, you do not need to have regular meetings with your work coach. But you can ask to meet one if you think it would help you to search for work.

If you earn above your CET, you will not have regular meetings with a work coach.

Self-employed earnings

If you have self-employed earnings, these will not count towards the AET.

Find out more about  Universal Credit if you’re self-employed.