What are the surplus earning rules?

Surplus Earning Rules

The Universal Credit ‘surplus earnings’ rules affect certain ‘high’ earners. They apply to both employed and self-employed workers.

A Universal Credit claimant whose earnings are too high to entitle them to Universal Credit in an Assessment Period, could have some of those earnings taken into account if they become entitled to Universal Credit again within six months.

Who will be affected?

Only a small number of Universal Credit claimants will be affected.

If you earn more than £2,500 over the amount you can earn before your award is reduced to nil, you are said to have ‘surplus earnings’.

The Surplus Earnings rules will therefore only affect those claimants whose Universal Credit dropped to nil due to a huge spike in their earnings or receiving a large sum from their employer – they will not affect everyone whose award drops to nil due to earnings.

Someone might have a spike in their earnings in one Assessment Period because they’ve:

  • Done a lot of overtime
  • Received arrears of pay
  • Received a large bonus
  • Received pay in lieu of notice
  • Received a lump sum of maternity pay
  • Accrued holiday pay that is paid in one large sum.

If your Universal Credit award has dropped to nil due to your earnings, then it is important that you make sure your award continues to be assessed every month even if you think you won’t be able to receive a payment because of surplus earnings from a previous month.

You will be notified if you have surplus earnings – seek advice from a Benefit Adviser who can explain who they work and what you should do.

Surplus earnings will stop being taken into account 6 months after they were first received.

Watch our video for more information:

Surplus Earnings Video