Universal Credit UK: How to find out how going back to work will affect your payment

The coronavirus crisis is having a devastating impact across the world, and more than 30,000 people in the UK have now sadly died from COVID-19. The pandemic is also having an impact on people financially too; more than 1.8 million claims have been made for Universal Credit since March 16, Work and Pensions Secretary Therese Coffey told MPs last week, while Office for National Statistics show UK businesses have furloughed a fifth of their workers on average.

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The payment is intended to help with living costs and it may be that a person is able to claim it if they’re on a low income or out of work.

Prime Minister Boris Johnson first announced the UK lockdown on March 23, and he is expected to address the nation this evening, in a pre-recorded speech which will air at 7pm.

While changes to the government messaging have changed today, the UK lockdown currently still remains.

Nevertheless, some may wonder how their Universal Credit payments will be affected if and when they are able to go back to work.

Unlike some of the legacy benefits, it’s possible to work and get Universal Credit, and there is no limit as to how many hours a person can work.

Earnings do affect payments however, and if a person is employed, the amount they get will depend on their earnings.

It will reduce gradually as they earn more – for every £1 earned, the payment reduces by 63 pence.

While some may calculate how their earnings affect their payments manually, it’s also possible to do so online via a benefits calculator.

Gov.uk signposts three independent benefits calculators, and these are hosted by Policy in Practice, entitledto, and Turn2us.

The tool can be used to see how increasing hours or starting a new job could affect how much a person gets.

Some people can earn a certain amount before their Universal Credit is reduced.

This is known as a the work allowance, and it is lower if a person has help with housing costs.

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How much is the Universal Credit work allowance?

The monthly work allowance is currently £292 if a person gets help with housing costs.

Should the person not get help with housing costs, then it is £512 instead.

This means the eligible person can earn up to £292 or £512 per month – depending on circumstances – before their Universal Credit reduces.

Who is eligible for the Universal Credit work allowance?

A person may be able to get the work allowance 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.

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