How to earn money each month without losing any of your Universal Credit
Key points
- If you have children or a health condition, the first £427 you earn each month does not reduce your Universal Credit by a single penny.
- After your work allowance, you keep 45p of every extra £1 you earn — so taking on more hours always leaves you better off.
- The work allowance went up from £411 to £427 in April 2026, so you can now keep slightly more each month before your UC is affected.
Many people on Universal Credit (UC) worry that taking on part-time work will cut their payments sharply. But if you have children or a health condition that limits your work, you have what is called a work allowance — and it means you can earn a set amount each month without losing any UC at all.
What is a work allowance?
A work allowance is the amount you can earn in a month before your UC starts to reduce. From April 2026, that amount is £427 a month if your UC includes the housing costs element.
That means if your earnings stay below £427, your UC does not go down by a single penny.
Who gets a work allowance?
You get a work allowance if at least one of these applies to you:
- you have a child or qualifying young person living with you, or
- you have a health condition or disability that DWP has assessed as limited capability for work (LCW or LCWRA).
If neither applies to you right now, there is no work allowance — your UC reduces from the very first pound you earn.
What happens above £427?
Once you earn more than £427 in a month, your UC goes down by 55p for every extra £1 you earn. DWP calls this the taper rate.
The key thing to know is that you always keep the other 45p. So earning more from work still puts money in your pocket, even after your UC adjusts.
For example, if you earn £550 one month:
- The first £427 is protected — no UC reduction at all.
- On the remaining £123, your UC goes down by £67.65 (£123 × 55p).
- You end up £55.35 better off than if you had not earned that extra £123.
What if my UC does not cover housing costs?
Your work allowance rises to £710 a month if your UC does not include a housing costs element — for instance, if your rent is already covered separately through a different arrangement.
How to check what applies to you
Log in to your UC online account at GOV.UK. The earnings section shows your work allowance for the current assessment period. If you are not sure how this works for your situation, Citizens Advice can go through it with you for free at citizensadvice.org.uk or by calling 0800 144 8848.
The work allowance went up from £411 to £427 in April 2026, so if you have been on UC for a while, you can now earn slightly more each month before any reduction kicks in.
Frequently asked questions
I am not sure whether I have a work allowance — how do I find out?
Log in to your UC journal at GOV.UK to see your earnings section, or call Citizens Advice free on 0800 144 8848 who can check for you.
Does the work allowance apply if I live in Scotland or Wales?
Yes — the work allowance applies throughout Great Britain and the amounts are the same in England, Scotland, and Wales.
Official source: https://www.gov.uk/universal-credit/how-your-wages-affect-your-payments