Universal Credit work allowance explained
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Quick answer: The Universal Credit work allowance lets you keep more of your earnings before the 55% taper applies — if you have children or limited capability for work. Without an allowance, every £1 of net earnings above any taper-free amount reduces UC by 55p.
The work allowance is one of the least understood Universal Credit rules. It determines how quickly earnings erode your award — and whether taking extra hours leaves you better off overall.
Who gets a work allowance
Claimants with children, or with limited capability for work / LCWRA, receive a work allowance. Single adults without children and without LCWRA generally have no allowance — earnings reduce UC from the first pound.
Higher vs lower allowance
If your UC includes help with housing costs, you get the lower work allowance. If housing is excluded (e.g. mortgage interest loan only, or not claiming housing element), the higher allowance applies. Check your statement for the exact figure each April.