How Many Hours Can I Work on Universal Credit? | Exploring Part-Time Limits

Are you wondering how many hours you can work while claiming Universal Credit? Navigating the rules around work and benefits can be challenging, but understanding the system can help you make informed decisions.

Universal Credit is designed to support individuals transitioning into or balancing employment, with payments adjusted based on earnings rather than fixed work hours.

How does the taper rate affect your income? What is the role of the work allowance in determining your payments?

This guide answers these questions, helping you understand how your work hours and earnings impact your Universal Credit claim.

Whether you work part-time, full-time, or are self-employed, we’ll explore how you can maximise your benefits while staying compliant.

Can You Work While Claiming Universal Credit?

You can work while claiming Universal Credit. The program is designed to support individuals in employment as well as those who are unemployed.

Unlike some legacy benefits, Universal Credit does not impose strict restrictions on the number of hours you can work.

Instead, it adjusts your payments based on your earnings, ensuring a gradual reduction in support as your income increases.

Effects of Work Status on Universal Credit

Employment Status	Impact on Universal Credit	Key Considerations
Part-Time Work	Payments reduce gradually	Retains eligibility for work allowance
Full-Time Work	Payments may phase out over time	May lose eligibility for some benefits
Self-Employment	Payments adjusted using MIF rules	Requires monthly earnings reports

How Many Hours Can You Work on Universal Credit?

Unlike legacy benefits, Universal Credit does not impose a fixed limit on the number of hours you can work. Instead, it uses your earnings to determine the amount of support you receive.

This means that you can work part-time or full-time without losing eligibility as long as your earnings remain within certain thresholds. The flexibility encourages claimants to work without fear of sudden benefit cuts.

Is There a Limit on Work Hours?

No, Universal Credit does not have an hourly limit. Instead, its focus is on earnings and their impact on your payments:

• If your earnings exceed your work allowance, your payments are reduced by the taper rate of 55%.
• Payments gradually reduce as earnings increase, creating a smooth transition from benefits to full independence.
• If your income surpasses eligibility thresholds, you may stop receiving payments, but you can reapply if your circumstances change.

Examples of Work Scenarios Under Universal Credit

1. Part-Time Jobs:
   • Perfect for parents, caregivers, or students.
   • Work allowances help retain more of your Universal Credit payments.
2. Full-Time Work:
   • Beneficial for individuals earning below the taper rate limits.
   • Universal Credit serves as a financial safety net during low-income periods.
3. Zero-Hour Contracts:
   • Payments adjust monthly based on variable earnings.
   • Ideal for workers with unpredictable schedules.

Key Points to Remember

• The work allowance applies only to claimants with children or limited capability to work.
• If you do not qualify for a work allowance, the taper rate applies to your entire income.
• Universal Credit recalculates payments monthly, reflecting changes in work hours or income.

This flexible structure helps claimants gradually transition to financial independence while ensuring ongoing support during periods of low income.

What Is the Universal Credit Work Allowance?

The Universal Credit work allowance is the amount of earnings claimants can keep before their Universal Credit (UC) payments begin to reduce.

It is an integral feature of the UC system designed to support individuals and families with children or those with limited capability for work.

The allowance ensures that claimants retain more of their income as they work, providing a financial boost while encouraging employment.

In 2025, the work allowance remains a vital tool for helping claimants transition into or maintain employment while still receiving support. It is applied before the 55% taper rate is used to deduct from Universal Credit payments.

Who Is Eligible for the Work Allowance?

Eligibility for the work allowance depends on specific circumstances, such as:

• Having Children: Claimants responsible for children or qualifying young people.
• Limited Capability for Work: Those assessed as having Limited Capability for Work (LCW) or Limited Capability for Work and Work-Related Activity (LCWRA).
• Joint Claims: Couples sharing a claim are entitled to one work allowance for combined earnings.

Not all claimants qualify for the work allowance. If you don’t meet these criteria, deductions are calculated directly from your total earnings.

Work Allowance Levels for 2025

As of 2025, the work allowance thresholds are:

• Lower Work Allowance: £404 per month for those receiving housing support.
• Higher Work Allowance: £673 per month for those not receiving housing support.

How Does the Taper Rate Affect Universal Credit Payments in 2025?

The taper rate is a key feature of Universal Credit that determines how much of your earnings are deducted from your benefit payments once you surpass your work allowance (if applicable).

This system is designed to ensure that claimants are always better off working, as benefits reduce gradually rather than stopping abruptly.

What Is the Taper Rate?

The taper rate specifies the percentage of your earnings above the work allowance that is deducted from your Universal Credit payments.

In 2025, the taper rate remains at 55%, meaning for every £1 you earn above the work allowance, 55p is deducted from your Universal Credit award.

Impact of the Taper Rate on Payments

1. If You Qualify for a Work Allowance

The taper rate is applied only to your earnings above the work allowance threshold.

Example:

• • • Monthly earnings: £1,200
    • Work allowance (without housing costs): £673
    • Earnings subject to taper: £1,200 – £673 = £527
    • Deduction: £527 × 0.55 = £289.85

2. If You Don’t Qualify for a Work Allowance

The taper rate is applied to your total earnings.

Example:

• • • Monthly earnings: £800
    • Deduction: £800 × 0.55 = £440

Earnings, Work Allowance, and Deductions (2025)

Earnings Per Month	Work Allowance Type	Earnings Above Allowance	Taper Deduction	Net UC Retained
£1,000	Lower (£404)	£596	£327.80	Remainder
£1,200	Higher (£673)	£527	£289.85	Remainder
£800	No Allowance	£800	£440	Remainder

Does Working Affect Other Benefits Linked to Universal Credit?

Working while claiming Universal Credit can affect other benefits, as your income and circumstances are used to calculate overall entitlement.

However, Universal Credit is designed to provide continued support, including housing and childcare elements, even as your earnings increase.

Here’s how working can influence related benefits:

• Housing Element: Payments for housing costs are included in Universal Credit but may reduce as your earnings increase, subject to the taper rate.
• Childcare Costs: Up to 85% of eligible childcare expenses can be covered, but this depends on your income and assessment period.
• Council Tax Reduction: This is managed separately by local authorities, and you may need to report changes in income to adjust your reduction.
• Free School Meals: Eligibility may depend on your household income and the number of hours worked.

Staying informed about how these elements interact with Universal Credit ensures you maximise your benefits while transitioning into work or increasing hours.

Are There Special Rules for Self-Employed Claimants?

Self-employed individuals claiming Universal Credit must follow specific rules to ensure accurate calculations of their payments.

These rules consider fluctuating earnings and differ from those applied to employed claimants.

Here’s what self-employed claimants need to know:

• Minimum Income Floor (MIF): The MIF assumes a minimum level of income based on the National Minimum Wage for the hours you’re expected to work. If your actual earnings fall below this amount, the MIF is used to calculate deductions.
• Monthly Earnings Reporting: Self-employed claimants must report their income and expenses monthly via their Universal Credit account.
• Startup Period: If your business is new, you may qualify for a 12-month startup period where the MIF does not apply.
• Work Allowance and Taper Rate: These apply similarly to self-employed individuals, with deductions made for earnings above the allowance.
• Impact of Losses: Business losses cannot offset your reported income for Universal Credit purposes.

Understanding these rules is crucial to managing your payments effectively.

What Happens if Your Earnings Exceed the Universal Credit Limit?

If your earnings exceed the eligibility limit for Universal Credit, your payments may stop. However, the system is designed to provide flexibility, allowing claimants to reapply if their circumstances change.

Here’s what happens when your earnings surpass the limit:

• Thresholds: The exact limit depends on your household circumstances, such as the number of dependents and housing costs.
• Automatic Adjustments: Payments gradually reduce as your income increases due to the taper rate, and they cease entirely if earnings exceed the calculated limit for your claim.
• Reapplying for Universal Credit: If your income drops below the threshold again, you can reapply without starting from scratch, as your account information remains saved.
• Impact on Other Benefits: Losing Universal Credit may affect access to related benefits, such as free school meals or council tax reductions.
• Monthly Reassessments: Universal Credit considers your income per assessment period, so one high-earning month could pause payments temporarily.

Monitoring your income ensures you stay informed about your entitlement status.

Conclusion

Understanding how work affects your Universal Credit payments is key to balancing employment and financial support.

The system’s flexibility, with features like the work allowance and taper rate, ensures that claimants are always better off working while gradually reducing their reliance on benefits.

Whether you work part-time, full-time, or are self-employed, staying informed about your entitlements helps you plan effectively.

By leveraging tools like the work allowance and reporting changes promptly, you can maximise your income and transition toward financial independence.

For tailored advice, consult official resources or seek guidance from your local Citizens Advice Bureau.

FAQs

How many hours can I work without losing Universal Credit?

Universal Credit does not impose a strict hourly limit. Instead, it focuses on your earnings. Payments are reduced based on the taper rate, allowing flexibility for part-time or full-time work.

What is the work allowance in Universal Credit?

The work allowance is the amount you can earn before the taper rate applies. In 2025, it’s £404 for claimants with housing costs and £673 for those without housing costs.

Does overtime affect Universal Credit payments?

Yes, overtime earnings are included in your monthly assessment. Any amount above your work allowance will reduce your payment by 55% of the excess.

Can self-employed claimants get a work allowance?

Yes, self-employed claimants qualify if they meet the conditions, such as having children or limited capability for work. Their earnings are assessed monthly.

What happens if my earnings exceed Universal Credit thresholds?

Your payments will stop if your earnings surpass the limit. However, you can reapply if your income drops in the future.

How often are Universal Credit payments adjusted?

Payments are recalculated monthly based on your income during the assessment period, ensuring they reflect any changes in your earnings.

Are there additional benefits for parents on Universal Credit?

Yes, parents can receive support for up to 85% of childcare costs and may qualify for free school meals, depending on their income and hours worked.