Tuesday, May 24

Universal Credit: What is the minimum income floor for UC?

When it comes to Universal Credit in the United Kingdom, it is important to bear in mind that not all people qualify as there is a minimum income floor.

The reason behind this is to ensure that those who need help most are prioritised, as the minimum income floor is worked out by looking at the national minimum wage and the number of hours you have agreed to work after meeting with your work coach.

Working out your minimum income floor

In order to figure out what your minimum income floor is, you will have to multiply the minimum wage for your age group by the number of hours you are expected to work, then multiply that number by 52 and divide it by 12 to get a monthly amount.

The minimum income floor is the number you are left with, and this is also referred to as your ‘individual earnings threshold‘.

National minimum wage rates

  • Apprentices aged 16-18 or first-year apprentices if you are 19 or older: £4.30
  • Age 16-17: £4.62
  • Age 18-20: £6.56
  • Age 21-22: £8.36
  • Age 23 and over: £8.91

Should you find that your minimum income floor is more than £797, you may have it reduced for tax and National Insurance reasons by the Department of Work and Pensions (DWP).

Impact of minimum income floor on payments

The DWP will figure out your payment by looking at either your actual earnings or your minimum income floor, and this is dependent on how much you have earned and your current living situation, such as whether you live with a partner.

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If you are living with a partner, both of your earnings will be looked at by the DWP in order to determine whether the minimum income floor is needed.

In this instance, you will have to work out your individual minimum income floor, figure out what your partner’s minimum income floor would be, add your partner’s amount to yours, and then from this you have the ‘couples earning threshold‘.

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