Universal Credit while working full-time

Hello! The short answer is yes, you absolutely can still get Universal Credit if you work full-time.

Unlike some older benefits, Universal Credit does not have a limit on the number of hours you are allowed to work. Instead of looking at your hours, the Department for Work and Pensions looks at how much money you actually take home in each monthly assessment period.

How your earnings affect your payment:

Because Universal Credit is designed to top up your income, your payment will gradually reduce as your earnings go up.

For every one pound you earn from your job, your Universal Credit payment goes down by 55 pence. This is known as the taper rate. The system is designed this way so that you are always financially better off working, because you keep your wages plus a portion of your Universal Credit.

Work allowances:

If you are responsible for a child, or if you have a disability or health condition that affects your ability to work, you might be entitled to what is called a work allowance.

A work allowance is a set amount of money you are allowed to earn before your Universal Credit starts to be reduced. If you do not have children or a relevant health condition, the 55 pence reduction applies to your earnings straight away from the first pound you earn.

How the system tracks your wages:

If your employer pays you through the standard Pay As You Earn tax system, which most employers do, HM Revenue and Customs will share your earnings information directly with Universal Credit. Your monthly statement will automatically adjust to reflect your wages for that month without you needing to send them your payslips.

Practical next steps:

1. Use a free online benefits calculator. Reputable charities like EntitledTo or Turn2us have excellent free calculators on their websites. You can type in your expected full-time take-home pay to see a fairly accurate estimate of how it will affect your Universal Credit.

2. Update your journal. If you are already claiming Universal Credit and have just started a full-time job, or increased your hours, make sure you report your new employment details as a change of circumstances in your online account.

3. Keep an eye on your statements. When your first full-time pay packet goes through, check your Universal Credit statement online a few days before your payment date to see how the maths has been worked out.

Just bear in mind that if your earnings are high enough, your Universal Credit payment will eventually reduce to zero. If this happens, your claim might be closed. However, if your earnings drop again within six months, it is typically very quick and easy to restart your claim without having to start the whole application process from scratch.