Universal Credit: What are surplus earnings and how does it affect my benefit money?

Those who receive Universal Credit may be in work and combining both the job and the benefit to be able to pay for things.

The monthly payment they get may be topped up if they have a health condition, look after children or have another particular circumstance.

Read more: Universal Credit: Can I have a benefit decision looked at again?

When you work, you will continue to be paid your Universal Credit unless your income goes above the threshold for payments, in which case the cash given to you will no longer be released.

If you earn a lot above the Universal Credit threshold for several months, you may have those earnings impacting your claim for months afterwards. This is part of what’s called ‘surplus earnings’. So, what exactly is this? Here’s what we know.

Universal Credit: What are surplus earnings and how does it affect my benefit money?

No-one can claim an unlimited amount of Universal Credit. An assessor will come to a decision about a payment when they examine your case.

If you work or you decide to work, your Universal Credit payment will go down depending on how much you earn. As your income rises, your Universal Credit payment will continue to reduce, and could end up at zero.

Surplus earnings begin on a Universal Credit claim when you start being paid £2,500 over the threshold at which you would receive no Universal Credit cash.

This could reduce the amount of money you receive with Universal Credit, with the possibility that you don’t receive a penny from your benefit claim.

As well as this, surplus earnings are carried over in the following monthly assessment period. This will carry on for each assessment period until you’ve got to a position where you do not have at least £2,500 over the threshold at which you no longer get Universal Credit.

So, you could, potentially for a few months, end up with no Universal Credit payment, depending on the amount of your ‘surplus earnings’.

In other words, when your earnings go below the point where your payment was halted, the surplus you have built up will go down. Once this has been eradicated, your Universal Credit payment will be released again.

You need to ensure you continue claiming Universal Credit even while you’re receiving no money so when your income does fall, you get your benefit cash again.

If you receive a benefit decision and you do not believe you have reached your surplus earnings, you can challenge the outcome and have it looked at again.

This is called a ‘mandatory reconsideration’. If you believe there’s been an error or important information missed, you don’t agree with the decision given or you want it to be given a second look, you can apply for a ‘mandatory reconsideration’.

You have one month to do this and must do it either by writing to the address on your decision letter, contacting the Universal Credit helpline or updating your online journal.

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