Universal Credit & Earnings: Quick Adviser Update
Universal Credit (UC) continues to fluctuate for working claimants because awards are calculated using monthly assessment periods and earnings actually received in each period. UC does not average income, meaning irregular or early pay can still cause sharp changes to entitlement.
Key rules at a glance
- 55% taper: For every £1 earned, UC reduces by 55p (after any work allowance).
- Work allowance: Only available where the claimant (or partner) has a child or a health condition affecting their ability to work.
- Statutory payments count as earnings, including SSP and statutory parental payments.
- Irregular pay risks: Being paid twice in one assessment period – or not at all in another – can temporarily reduce or end UC.
Administrative Earnings Threshold (AET) – current rates
From 1 April 2026, AET levels are:
- £991 per assessment period for individual claimants
- £1,597 per assessment period combined for couples
AET affects in‑work conditionality, not the UC taper. Earnings below AET can place claimants in a more intensive regime requiring steps to increase hours or pay.
Important context on AET increases
NB: AET has increased several times in recent years, most recently due to:
- National Living Wage increases (including April 2025), and
- a structural change from 13 May 2024, when the assumed hours used to calculate AET rose from:
- 15 → 18 hours per week (individuals), and
- 24 → 29 hours per week (couples).
These changes mean more low‑paid workers are now below AET and subject to earnings‑related conditionality despite working regularly.
Conditionality safeguards
Advisers should remember Regulation 99 of the Universal Credit Regulations 2013, which limits when work‑related requirements must be imposed. This can be relevant where increased expectations are inappropriate due to the claimant’s circumstances.
Adviser checklist
- Check assessment period dates where UC drops unexpectedly
- Watch for regime changes when earnings move around AET
- Review claimant commitments carefully
- Challenge inappropriate requirements using Reg 99
Universal Credit and earnings – GOV.UK
The Universal Credit Regulations 2013 – The work-related requirements Regulation 99