If you are under 60 and out of work major changes in the benefits you can get start in October.
Unemployment benefit is being abolished from October 7. From that date anyone who is out of work and looking for a job will have to claim a new benefit called jobseeker's allowance or JSA. This new benefit will be different in several ways from unemployment benefit
Jobseeker's allowance will also replace income support for anyone who is claiming benefit on the basis that they are out of work. That will not apply to people over 60, disabled people who cannot work, carers, or single parents. They will continue to claim income support as they do now.
Although the Government says that the changes will improve the chances of getting work and ensure that money is only given to those who are genuinely seeking a job, they will also have the effect of saving money - nearly £300 million a year once they are fully in place.
The Jobseeker's Agreement
With the new benefit comes a new jargon. People who unemployed and looking
for work will be known in future as 'jobseekers'. At the heart of the new system
is a document called the jobseeker's agreement which sets out the work the
jobseeker is looking for, the hours in a week they are prepared to work, and
what they will do to find a job. Normally you will be expected to agree to work
for at least 40 hours in a week. People with a disability that restricts the hours
they can work or those with caring responsibilities can specify a shorter period.
Restrictions on hours or travel to work will be allowed only if they are
reasonable. And if taken overall these restrictions mean that it is unlikely you
will find work then benefit can be refused.
The agreement is made by the jobseeker together with a person called a 'client adviser' who is an employee of the Employment Service. Sorting out the agreement will be the first stage of making a claim for jobseeker's allowance. Once the agreement is made your claim for benefit will be passed to the Benefits Agency for a decision.
In many ways the new agreement is just a way of setting out formally the conditions which currently apply to people claiming unemployment benefit. You will have to show that you are
Normally people will be expected to be available for work immediately which usually means you can start work tomorrow. However, if you are responsible for caring for a child or a disabled person that can be extended to give you 48 hours leeway. The same rule applies if you are doing voluntary work.
The new benefit
Once you have signed the agreement then your claim for jobseeker's allowance
is passed to the Benefits Agency for a decision on your entitlement to benefit.
At the moment if you are unemployed you can claim unemployment benefit for
a year if you have paid sufficient national insurance contributions. Otherwise
you claim income support, a means-tested benefit which not everyone can get.
From October there will be two sorts of jobseeker's allowance. One sort is paid for up to six months to people who have paid enough national insurance contributions. This 'contributory' jobseeker's allowance is not means-tested.
There is also a means-tested version of jobseeker's allowance for people who do not qualify for the contributory version or whose contributory jobseeker's allowance has run out. It is also paid to people who need extra money because of family responsibilities or a mortgage.
Having two different versions of the same benefit makes it difficult to explain the rules and it is important to realise that many of the rules about contribu tory jobseeker's allowance are very different from those which apply to means- tested jobseeker's allowance.
National Insurance
To get contributory jobseeker's allowance you have to have paid enough
national insurance contributions. That means that you have to have contribu
tions paid or credited for the two tax years before the calendar year in which
you are claiming. So if you claim in 1996 then you have to have a full
contribution record in 1993/94 and 1994/95. People claiming after a period of
looking after a disabled person can use instead the two tax years before the
year they started to care for someone full time. Two sorts of contributions do
not count for jobseeker's allowance. They are
If you fulfil the contribution conditions then you will get jobseeker's allowance for six months without undergoing the means-test. The rate of the allowance in 1996/97 is £47.90 a week unless you are under 25 when it is £37.90. Once you reach pension age jobseeker's allowance stops. There are no extra amounts for dependants. If you have children you will get child benefit. If you have a dependent partner such as a wife or husband then you may be able to claim means-tested jobseeker's allowance to top up your benefit subject to the means-test rules.
Although contributory jobseeker's allowance does not have a means-test as such, there are two circumstances in which it will be reduced due to other income. If you have a pension, either from a previous job or a personal pension plan, which is more than £50 a week then your jobseeker's allowance will be reduced penny for penny. That means that if your pension is £97.90 a week or more then you will not get any contributory jobseeker's allowance. If you work part-time then you will normally be allowed to keep £5 of your earnings, the rest will be deducted penny for penny off your jobseeker's allowance.
If you fulfil these conditions, contributory jobseeker's allowance is available for six months without the normal means-test. In particular, married women and people with more than £8000 savings can still get it.
The means-test
If you do not qualify for contributory jobseeker's allowance or it has run out
after six months or you need more income then you may be able to get the
means-tested version of jobseeker's allowance. The means-test looks at your
income and savings. If you are married, or live with someone as if you were,
then their income and savings are also taken into account. You cannot get
means-tested jobseeker's allowance if
The amount of the means-tested jobseeker's allowance is the same as the amount of income support - that is £47.90 for you plus an extra £27.30 for a dependent wife or husband (£75.20 altogether). In addition you will get a contribution towards your mortgage interest payments. If you are under 60 that will not start for at least eight weeks after you claim. If you took your loan out after October 1 1995 it will not start for 39 weeks.
Back To Work Bonus
If you are getting jobseeker's allowance and you do some part-time work you
will be allowed to keep only the first £5 a week of your earnings (£10 if you are
a member of a couple; £15 if you are a single parent). The rest will deducted off
your allowance. But half of the amount deducted will be saved for you by the
Benefits Agency and when you get a job or reach the age of 60 you can be paid
that money in cash. It is called the Back To Work Bonus and you must claim
it. It will only be available to people who have been claiming jobseeker's
allowance for at least three months and there is an upper limit to the bonus of
£1000.
At age 60
When you reach the age of 60 you will not have to worry about jobseeker's
allowance or the jobseeker's agreement. At 60 women can claim their
retirement pension if they are entitled to one either on their own contributions
or on their husband's if he is claiming his own retirement pension. A man aged
60 no longer needs to worry about National Insurance contributions as he is
given credits for the five years from 60 to 65. At 60 men and women can claim
income support if they need it without having to be available for work. And
remember that if you have been claiming jobseeker's allowance and working
part-time then you may be due a Back To Work Bonus at 60.
Transitional rules
If you are already getting unemployment benefit or income support as an
unemployed person on October 6 1996 then you will continue to be paid
jobseeker's allowance at the rate you were getting your unemployment benefit.
These transitional rules will apply until your unemployment benefit runs out.
That will happen six months after you first claimed it if that date was after
April 7 1996 or twelve months if you claimed before April 8 1996.
More information
You can get details of the jobseeker's allowance from your local Benefits
Agency or Employment Service office. If you want help with an appeal or a
dispute you should go to your local Citizens Advice Bureau. It will be in the
phone book. There are also two comprehensive independent guides -
October 1996