Work and money can affect almost every part of your life — from your entitlement to benefits and help with housing to how much you have left after paying your essential expenses.
Understanding the rules can be difficult, particularly when your income changes, you work irregular hours, are self-employed, or receive benefits alongside your earnings.
At UK Benefits Help, we provide practical support to help you understand your options, work out what you may be entitled to and deal with the paperwork involved.
Working and claiming benefits
You do not necessarily have to stop receiving benefits because you start work.
Some benefits can continue while you are working, although the amount you receive may change depending on your earnings and circumstances.
For example, if you receive Universal Credit, your payment will normally reduce as your earnings increase. The amount you earn and the circumstances of your household can affect how much Universal Credit you receive.
We can help you understand:
- How work affects Universal Credit
- How your wages are taken into account
- What happens when your hours or income change
- How self-employed earnings are treated
- Whether you may still qualify for help with housing costs
- What changes you need to report
- How other benefits may be affected by your income
Starting work does not automatically mean that you will lose all your benefits.
Universal Credit and earnings
Universal Credit is calculated on the basis of your circumstances and, for people who are working, their earnings.
For employees, your earnings are generally reported to Universal Credit automatically through HMRC’s PAYE system. Your Universal Credit payment can therefore change from one assessment period to another if your wages change.
This can be particularly important if you:
- Work different numbers of hours each month
- Receive overtime
- Are paid weekly, fortnightly or four-weekly
- Receive bonuses or other payments
- Have recently started or stopped work
- Have more than one job
- Have fluctuating income
We can help you understand how your earnings may affect your Universal Credit and what to check if a payment appears different from what you expected.
Read more about Universal Credit
Self-employment and benefits
Being self-employed does not automatically prevent you from claiming Universal Credit.
However, the rules for self-employed people can be more complicated than for employees. Universal Credit may look at your monthly self-employed income and allowable business expenses, and in some circumstances the Minimum Income Floor may apply.
It is important to keep accurate records of your business income and expenses and to report your earnings correctly.
We can help with:
- Understanding how self-employment affects Universal Credit
- Reporting monthly self-employed income
- Identifying relevant business expenses
- Understanding the Minimum Income Floor
- Providing evidence of your self-employed activity
- Understanding what happens when your income fluctuates
- Checking whether your circumstances may have changed your entitlement
If you are self-employed and receiving benefits, keeping good financial records can make a significant difference.
Starting work
Starting a new job can be exciting, but it can also raise practical questions if you currently receive benefits.
You may be wondering:
Will I lose my Universal Credit?
What happens to my housing costs?
When should I report my new job?
What if my first wage is higher than usual?
Will my Council Tax Support change?
The answer depends on your individual circumstances.
Before assuming that starting work means you will be financially worse off, it can be useful to look at the whole picture — including your wages, benefits, rent, Council Tax and other essential costs.
Losing or leaving a job
If you lose your job, your benefits may be affected — but you may also become entitled to additional support.
If you have stopped working, your circumstances may need to be reported to Universal Credit or another benefit.
This can be particularly important if you:
- Have been made redundant
- Have been dismissed
- Have resigned
- Have had your hours reduced
- Have a temporary loss of income
- Have stopped self-employment
- Are waiting for your final wages or holiday pay
The reason why your employment ended can also be relevant in some benefit situations.
If you are unsure what to report or what evidence you need, getting advice can help you avoid unnecessary delays or problems.
Managing your money while receiving benefits
Benefits are designed to help with living costs, but managing a limited or fluctuating income can still be difficult.
Your money may need to cover:
- Rent or mortgage payments
- Council Tax
- Gas and electricity
- Water
- Food
- Travel
- Telephone and internet
- Household expenses
- Childcare
- Health and personal care
- Debts and repayments
When your income changes from month to month, budgeting can become particularly difficult.
We can help you understand how your income and benefit payments fit together and identify questions you may need to raise with the relevant benefit office, council or other organisation.
Wages, payslips and deductions
Your payslip can contain several different figures, including your gross pay, tax, National Insurance, pension contributions and other deductions.
The amount that reaches your bank account is not necessarily the same amount that is used when considering your overall financial situation.
If your Universal Credit payment appears to have changed unexpectedly, it can be useful to compare:
- Your payslip
- The wages reported by your employer
- Your Universal Credit statement
- Your assessment period dates
- Any changes you have reported
A payment that looks incorrect is worth checking rather than simply assuming that the calculation is right.
Savings and capital
Savings and other capital can affect entitlement to some means-tested benefits.
For Universal Credit, the rules concerning capital are particularly important. Money held in bank accounts, investments and certain other assets may need to be taken into account.
However, not every asset is treated in the same way, and the rules can depend on what the money is and how it is held.
If you have savings, investments, a lump sum or money from another source, it is important to understand how this could affect your benefits before making assumptions.
