How Much Can You Earn on Universal Credit? UK Guide

Universal Credit is designed to support people with low or no income, but what happens when you start earning? Many assume that even small increases in pay will wipe out their entitlement—but that’s not always the case. You can work and still receive Universal Credit, but how much you earn and how often you're paid can directly affect how much you get.

This guide breaks down the current rules, thresholds, the new 30-hour rule, and what to consider before accepting a pay rise if you're claiming Universal Credit.

What Is Universal Credit?

Universal Credit is a benefit for people who are unemployed or on a low income. It replaces six older benefits, including Working Tax Credit, Housing Benefit, and Income Support. It's paid monthly and includes support for housing, childcare, and disabilities depending on your circumstances.

You can claim Universal Credit whether you're out of work or working, but your earnings affect how much you receive.

Who Is Eligible?

You can apply for Universal Credit if:

• You’re 18 or over (some exceptions apply for 16-17 year olds)

• You live in the UK

• You have less than £16,000 in savings (joint with a partner if applicable)

• You’re not in full-time education (with exceptions)

• You agree to a ‘claimant commitment’ with the Jobcentre

Your partner’s income, savings, and working hours are taken into account—even if only one of you is applying.

What Are the Thresholds?

There is no set income "cut-off" where Universal Credit stops, but how much you earn determines how much your payment is reduced.

For most claimants, your payment is reduced by 55p for every £1 you earn over your Work Allowance (if eligible). If you don’t qualify for a work allowance, every £1 you earn reduces your UC by 55p.

How Much Can I Earn and Still Keep My Universal Credit?

It depends on your circumstances. If you qualify for a work allowance, you can earn a certain amount before your UC starts to taper off.

Work Allowance (2024/25):

• £379/month if you get housing support

• £631/month if you don’t get housing support

After you earn above this, the taper rate applies (55%). So the more you earn, the more your Universal Credit reduces—but not instantly to zero.

Example: Universal Credit and Earnings

Let’s say:

• You don’t get housing support

• You earn £1,000 in a month

• Your work allowance is £631

Only the remaining £369 (£1,000 - £631) is subject to the 55% taper:

• 55% of £369 = £202.95

So your Universal Credit payment is reduced by £202.95 that month—not cancelled.

If your income fluctuates, your UC adjusts automatically based on information reported to HMRC via PAYE.

What Is the New 30-Hour Rule for Universal Credit?

From April 2024, new rules mean some Universal Credit claimants must actively look for or work 30 hours per week to continue receiving full benefits. This applies to:

• Main earners in a couple

• Single people expected to work (not carers or with children under 3)

This doesn’t mean you won’t get UC if you work fewer hours, but the Jobcentre may increase your responsibilities under your claimant commitment. If you don’t meet this requirement, you could face sanctions.

How Often You’re Paid Can Affect Universal Credit

If you're paid weekly or every four weeks, some months you’ll get more than one pay period counted in a Universal Credit assessment window. This can temporarily reduce or suspend your payment, even if your average income hasn’t changed.

It doesn’t mean you’re earning too much long term—it’s a quirk of how UC assessments are calculated monthly.

Will Universal Credit Know If I Am Earning More?

Yes. Universal Credit is linked directly to HMRC’s Real Time Information (RTI) system. Every time you get paid through PAYE, your earnings are automatically reported to DWP. If you earn more one month, your UC adjusts automatically.

There’s no need to report wage changes unless you're self-employed or not paid through PAYE.

Will My Payments Automatically Stop?

If your income pushes your entitlement to £0 for six months in a row, your Universal Credit claim will automatically close. You’d need to make a new claim to start again. This can also affect access to other support like free prescriptions or childcare help.

If your earnings dip again before six months is up, UC may restart with no need to reapply.

Is My Partner’s Salary Considered?

Yes. Universal Credit is a household benefit. If your partner earns a salary, it counts towards the household income—even if you're the only person claiming.

This means that in some cases, a partner’s earnings alone may reduce or eliminate UC entitlement, especially if they’re full-time employed and not eligible for any work allowance.

What Should I Consider Before Accepting a Pay Rise?

Getting a raise is generally a good thing—but it may reduce your Universal Credit. Before deciding, think about:

• Net impact: Will the increase in salary outweigh the reduction in UC?

• Childcare support: Higher earnings might reduce UC, but you could get more help through other schemes like Tax-Free Childcare

• Other benefits: Losing UC may mean losing access to Council Tax reductions or free school meals

• Work requirements: A higher wage might reduce pressure from the Jobcentre, especially under the 30-hour rule

If a raise will just push you into a month where your UC is temporarily wiped out due to timing, it might be worth checking the bigger picture first.

Final Thought

You can earn money and still receive Universal Credit, but it’s a balancing act. The taper system means that support gradually decreases rather than cuts off instantly, and with work allowances in place, it pays to work more. However, things like how often you’re paid, your partner’s earnings, and the new 30-hour rule can all affect your payments. Always check the numbers using an up-to-date benefits calculator—or speak to a welfare adviser—before making any big financial decisions.