What the earnings taper is and how this affects Universal Credit
The Universal Credit earnings taper is a reduction to your Universal Credit based on your earned income. The taper rate sets the amount of benefits a claimant loses for each pound they earn. The earnings taper rate is currently 63%.
This means for every pound you earn over your work allowance (if you are eligible for one) your Universal Credit will be reduced by 63 pence.
To work out the earnings taper that applies to your award:
- Take your total monthly earnings figure after tax, National Insurance and relevant pension contributions have been taken off
- Deduct your monthly work allowance, which is the amount you can earn without your benefit being affected (if you are eligible for one)
- Apply the taper rate by multiplying the remaining earnings by 0.63
This is the amount that will be taken from your Universal Credit maximum amount when calculating your award.