Timing of adjustment

Income affects your earnings-related allowance on a payment basis, i.e. payments are taken into account during the period in which you receive them.

Remember to record your working days and hours in the application according to when you actually worked even if the effect of your wages falls on the following application period. We will determine whether your allowance needs to be adjusted based on your income and the application period on which the effect should fall.

We may deviate from the payment-based adjustment rule if, for example, you have been laid off with a shorter working week and you are receiving income from part-time work or self-employment at the same time. For more information on how working a shorter week affects the adjustment process, see Lay-off with a shorter working week.

Another exception would be if you get paid for several months’ work during the same application period. In such circumstances, your pay may affect your earnings-related allowance over several months.

The payment-based adjustment rule became law on 1 April 2019. Previously, income was recognised during the period in which it was earned.