Earnings threshold rises to £846 a month

The earnings threshold used in the benefit cap grace period for Universal Credit claimants rose from £793 a month to £846 a month on 1 April 2025, according to the charity Gingerbread¹. The threshold is one of the tests that decides whether a household that has stopped working, or whose earnings have fallen, keeps its exemption from the benefit cap for up to nine months¹.

The cap itself limits the total amount a household can receive from a list of benefits. For single parent families, Gingerbread gives the following weekly and annual limits¹:

Where income from the capped benefits goes above those amounts, Universal Credit or Housing Benefit is reduced until income falls below the limit¹. The benefits counted towards the cap include Child Benefit, Child Tax Credit, Housing Benefit, Incapacity Benefit, Maternity Allowance, Severe Disablement Allowance, Widowed Parent's Allowance and Universal Credit, unless the claimant receives the limited capability for work and work-related activity element¹. Employment and Support Allowance counts only where the claimant is in the work-related activity group¹.

The grace period applies where a claimant is on Universal Credit because they stopped working or their earnings fell, is now earning less than £846 a month, and earned at least the earnings threshold in each of the 12 months before their earnings dropped or they stopped working. Gingerbread sets out the threshold as "£793 up to 31 March 2025 and £846 from 1 April 2025"¹. Time on maternity leave, paternity leave, adoption leave or Statutory Sick Pay still counts as being in work for this purpose¹.

Separately, the cap does not apply at all to a Universal Credit claimant who earns at least £846 each month after tax and National Insurance, or who lives in temporary or sheltered accommodation¹. It also does not apply to people receiving Working Tax Credit, even at £0, the work-related activity element of Universal Credit for a disability or health condition, or the carer element of Universal Credit¹. A further list of disability and related benefits exempts a household from the cap, including Personal Independence Payment, Disability Living Allowance, Attendance Allowance, Carer's Allowance, Adult Disability Payment, Child Disability Payment, Guardian's Allowance, Industrial Injuries Benefits, war pensions and Armed Forces payments¹.

Why it matters for households

The change affects households already subject to the cap, or facing it, whose exemption depends on their recent earnings record. For a household that stopped working or saw earnings fall, the amount it must have earned in each of the 12 months before that point is now £846 rather than £793, and the amount it can currently earn while keeping the grace period is also £846¹. The grace period lasts up to nine months¹. Households whose earnings from work reach £846 a month after tax and National Insurance are outside the cap altogether, as are those in temporary or sheltered accommodation¹. The cap amounts themselves are unchanged in the figures given: £486.98 a week in Greater London and £423.46 a week elsewhere for single parent families¹. How much a household loses depends on which benefits it receives and how far its total exceeds the limit, since Universal Credit or Housing Benefit is reduced until income is below the cap¹. The interaction with the work allowance and taper determines what a household keeps as earnings rise, and help with rent may be available where the cap leaves a shortfall.

What happens next

Gingerbread's page, last updated 13 April 2026, records the threshold as £846 from 1 April 2025 and does not report any further change to it¹. No end date for the £846 figure has been reported. Claimants not on Universal Credit can call the benefit cap helpline on 0800 169 0145¹.