The Department for Work and Pensions (DWP) has updated online guidance to help people in work claiming Universal Credit understand how the amount they earn and how often they are paid, can affect benefit entitlement and the amount of money they receive. The update clarifies what you should do, and the support you will get, if you earn above the Administrative Earnings Threshold (AET).
The guidance explains that if you or your partner are working, how much Universal Credit you get will depend on how much you earn each month – known as your ‘assessment periods’. You can check how much Universal Credit you will get each month in the statement in your online account, but your benefit payment will go down as your wages go up, and increase again if you stop working or your wages go down.
For every £1 you or your partner earns your payment goes down by 55p. This amount will be automatically deducted from your Universal Credit payment. It’s important to be aware there are different rules if you’re self-employed – find out more here.
Five ways Universal Credit payments could be affected
- If you are responsible for a child
- Have a health condition
- Do not get paid in an assessment period
- Get paid more than once in an assessment period
- Earn a different amount each assessment period
Full details of these with examples can be found on GOV.UK here.
Earnings and Universal Credit
When you claim Universal Credit you agree what you need to do to:
- Prepare for and look for work
- Increase your earnings, if you’re already working
Details of what you must do in return for Universal Credit are in your ‘claimant commitment’.
The ’Administrative Earnings Threshold’ (AET)
The AET is an amount you can earn that affects what you’re asked to agree to.
- Individual claimants – the AET is £892 per assessment period
- In a couple – the combined couple’s AET is £1,437 per assessment period
If you earn below the AET
Individual claimants earning below the AET during an assessment period must:
- Show you are actively looking for more, or better-paid work
- Be available for work
The exception to this is unless you are part of a couple whose combined earnings are at, or above, the couple’s AET of £1,437 per assessment period.
DWP guidance explains that if you are part of a couple whose individual earnings are below the individual AET, and whose combined earnings are below the couple’s AET, both of you must:
- Show you are actively looking for more, or better-paid work
- Be available for work
DWP guidance adds: “You will also get regular personalised support from a ‘work coach’. Your work coach can help you with job search strategies, interview skills and connecting with employers.”
If you earn above the AET
DWP says that if you earn the individual AET or more, you will not have regular meetings with a work coach. Where possible you should still try to look for more or better-paid work as you will be better off overall if you earn more.
This is also the same if you’re in a couple, and your combined earnings are equal to or higher than the couple’s AET.
The Conditionality Earnings Threshold (CET)
The CET is an amount that’s based on the number of hours you can reasonably be expected to work or do work-related activities. It is based on your circumstances.
DWP explains: “If you earn between the AET and your CET, you do not need to have regular meetings with your work coach. But you can ask to meet one if you think it would help you to search for work.
“If you earn above your CET, you will not have regular meetings with a work coach.”
The full guide on Universal Credit and earnings can be found on GOV.UK here.