Income that comes from earnings (whether from employment or self-employment) is defined as ‘earned income’ in the universal credit regulations. However, we will simply refer to it in this chapter as ‘earnings’.

How do earnings affect universal credit? – You may be allowed to keep some of your earnings up to a certain limit before your universal credit is affected. This is called the ‘work allowance’ and is set at two different rates, depending on your circumstances. If a work allowance is applied, earnings* in excess of the allowance will reduce your universal credit by 55p in the £1. If you are not eligible for a work allowance, all your earnings* will reduce your universal credit by 55p in the £1. See Chapter 15(1) and (9) for details.

* after the appropriate deductions have been made – see 2 below

Your partner’s earnings – If you are one of a couple (see Chapter 14(3) ), your combined earnings are taken into account in the calculation.
UC Regs, reg 22