How much can I earn before Universal Credit is reduced and do I get a work allowance?

HOUSEHOLDS can get thousands of pounds in the form of Universal Credit - but your entitlement is reduced if you start earning.

The Government benefit is paid once or twice a month and designed to help with living costs.

But it is also designed to encourage people back into work, so is reduced when you start receiving a salary.

There are some households that can earn up to a certain amount before having their Universal Credit reduced though.

Here's everything you need to know about the "taper rate" and "work allowance".

Can I work while claiming Universal Credit?

You can work when claiming Universal Credit but payments are designed to decrease the more you earn.

That's because it is supposed to help prop up those who want to get back to work but might not be able to for any number of reasons.

So you can work while claiming Universal Credit, but the more hours you work and the more you take home in pay, the more your payments will be reduced.

How much can I earn before Universal Credit is reduced?

For every £1 you earn your Universal Credit payments reduce by 55p - this is known as the taper rate.

However, some people are eligible for what's known as a "work allowance" - where deductions aren't made until you earn over a certain amount.

You get a work allowance if you (or your partner) are responsible for a child or have "limited capability for work".

Limited capability for work is when you may not be able to look for work now, but have to take steps to procuring some.

The Universal Credit work allowance is lower if you also get help with housing costs.

The monthly work allowances are:

• £379 if you get help with housing costs
• £631 if you don't get help with housing costs

How much you earn and whether you'll be entitled to Universal Credit payments will depend on your circumstances.

The total amount of benefits you can receive is capped at £25,323 a year for couples and single parents living in Greater London.

Meanwhile, it's £22,020 a year for those under the same circumstances but living outside Greater London.

Single adults in Greater London can receive up to £16,967 a year and £14,753 outside Greater London.

How many hours can I work on Universal Credit?

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

Universal Credit payments are calculated on how much you earn - not your hours of work.

You can use a benefits calculator to see how taking on extra hours might affect your payments though.

The way you're paid can also affect your Universal Credit payments.

They are based on how much you earn in each monthly "assessment period".

If you're paid more than once in an assessment period then this can reduce your benefit payment.

For instance, if you get paid every four weeks rather than monthly, you may have one month where two salaries fall in one assessment period.

As you've earned more for assessing Universal Credit, your entitlement can be reduced.

You can ask your work coach to move the wages into a different assessment period if this happens.

Do you have a money problem that needs sorting? Get in touch by emailing money@the-sun.co.uk.

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