If you’re employed, your universal credit reduces as you earn more – for every £1 you earn, your payment reduces by 63p.
But if you or your partner are responsible for a child, or are living with a disability or condition that affects your ability to work, you’re eligible for a work allowance.
The work allowance is a set amount you can earn before your universal credit is reduced.
There are two levels of work allowances, depending on your circumstances:
- If you’re getting housing support, you can earn £2,376/year in your pay packet.
- If you’re NOT getting housing support, you can earn £4,908/year in your pay packet.
But from April next year, you’ll be able to earn an additional £1,000 a year before your universal credit is affected.
As you won’t lose the 63p per £1 on this £1,000, you will get an extra £630 in your pocket.
The Chancellor said the measure is a response to hearing the concerns about the rates and allowances of universal credit.
As part of the Budget, an additional £1 billion was pledged over the next five years to support moving existing benefit claimants onto universal credit.
In short, this means 1.1 million people will get an extra one-off payment from their existing jobseeker’s allowance, income support, and income-related employment and support allowance worth an average £200 to cover them for a two-week period.