When a UC claimant is working their net earnings will be taken into account - their maximum UC figure will be reduced by 55p per £1 net earnings above any applicable Work Allowance.
In other words the Work Allowance is how much they can earn each month before their earnings affect their UC award.
But not all claimants are entitled to a Work Allowance - only those with children or who (or whose partner has) been found to have (or treated as having) a Limited Capability for Work.
Different claimants are allocated different 'Work Allowances' in order to reflect the needs of their type of household.
There are two figures for each of the six groups shown below.
A higher allowance is given to those claimants with no Housing Costs Element included in their assessment.
(HCE Included or living in temp accommodation)
(Everyone else ie homeowners, non-deps, living in specified accommodation)
Single Claimant – no children
Single Claimant – Limited Capability for Work
Couples – no children
Couple – with children
Couples – one or both Limited Capability for Work
The Work Allowance amounts were changed by the autumn Budget 2021.
Where a claimant is awaiting a Work Capability Assessment to see if they have a Limited Capability for Work they are not entitled to the Work Allowance (unless they have a dependent child). However, once they are found to have a Limited Capability for Work we would argue that the Work Allowance should then be included in their UC award back to the beginning of the Monthly Assessment Period in which their 'relevant period' started (once you've escaped you can read more about this on the Housing Systems website).
Where a claimant is pension age (ie part of a mixed age couple claiming UC) and gets Attendance Allowance, Personal Independence Payment or Disability Living Allowance they will be treated as having a Limited Capability for Work and so if they or their partner is working they should be entitled to a Work Allowance (and if applicable a Childcare Costs Element).