Jobseeker’s Allowance is worth less and harder to claim than ever before

While unemployment is continuing to rise, & the labour market remains fragile, the rate of increase in unemployment has been slower than we could have expected.

While unemployment is continuing to rise, and the labour market remains fragile, the rate of increase in unemployment – by both the claimant and International Labour Organisation (ILO) measures – has been slower than we could have expected.

But this does not mean that, as some newspapers have been suggesting, unemployed people have got it easy. TUC analysis of Institute for Fiscal Studies (IFS) and Annual Survey of Hours and Earnings (ASHE) data shows that while in 1985 unemployment benefits were worth 18 per cent of average earnings, this had fallen to just 10 per cent by 2008, and rose only very slightly to 11 per cent of average earnings this year.

When benefits are uprated in April 2010 the ratio will improve slightly again, but will remain significantly lower than during previous recessions, and while their real terms value has been declining, the conditions that have to be met to allow unemployment benefits to be claimed have been on the increase – a process that started in 1979 and has never stopped.

When unemployment insurance was first introduced in 1946, it was based on the idea that workers made contributions to the fund (national insurance) in return for benefit payments if they lost their jobs. This system was accompanied by means tested support for those who were out of work but had not built up contributions.

By 1966 benefits were payable for 12 months of unemployment, with earnings related supplements available for six. But by 1980 earnings related supplements to unemployment benefits were being cut and during the decade further changes included making the benefit taxable, denying 16-17 year-olds and full-time students the right to claim and increasing the maximum disqualification periods from six to thirteen weeks.

Jobseekers Allowance (JSA) was introduced in 1996, replacing Unemployment Benefit and means-tested support, but accompanied by further cuts in entitlements. The maximum period for payment of contribution based benefits was cut from 12 to 6 months (after which only those with very low incomes could receive means tested JSA), and the amount available for adults aged under 25 was reduced.

While there haven’t been any significant reductions in entitlements since Labour have been in power, none of the previous cuts have been reversed and the conditions that jobseekers face in order to demonstrate they are actively seeking jobs have been increased.

While workers continue to make contributions, contribution-based payments are now only a minor part of the system, and those who do qualify for the means tested element are consigned to living significantly below the poverty line. The New Policy Institute (NPI) recently found that more households are living on incomes of less than 40 per cent of median income than ever before, and that working-age adults without dependent children are much more likely than any other group to have a very low income – below the 40 per cent threshold.

With benefit rates so low, this is no surprise. But the TUC believes that workers who have lost their jobs and can’t find work deserve significantly more.

Our guest writer is Nicola Smith, Senior Policy Officer at the TUC

13 Responses to “Jobseeker’s Allowance is worth less and harder to claim than ever before”

  1. Jonathan Taylor

    RT @leftfootfwd: Jobseeker’s Allowance is worth less and harder to claim than ever before: http://is.gd/5vZNC @TUCNews

  2. JamieSW

    RT @leftfootfwd: Jobseeker’s Allowance is worth less and harder to claim than ever before: http://is.gd/5vZNC @TUCNews

  3. Bearded Socialist

    To far too large an extent this is because those on benefits are punished in order to pacify the rightist papers. I speak as someone who lost their job and was denied JSA

  4. Ben Furber

    RT @leftfootfwd: Jobseeker’s Allowance is worth less and harder to claim than ever before: http://is.gd/5vZNC @TUCNews

  5. Anon E Mouse

    Bearded Socialist – How’s the job hunting going dude?

    I don’t think it is low to pacify the papers, I just think the money’s all gone…

  6. Don Spunik

    Jobseeker's Allowance is worth less and harder to claim than ever … http://bit.ly/4sTwiU

  7. Rory

    I received the JSA for about two months after I graduated, despite the fact that I was living at home very comfortably.

  8. Lynda Edwards

    I consider it unfair that I worked hard for 35 years of my life then, at the age of 50, was made redundant from a large insurance corporation when they “got rid of the “old” people!”I had good appraisals from my former employers yet neither agencies nor permanent employers wanted someone my age. I went to the Jobcentre after temporary work fizzled out (I tried several agencies) and they only paid me for six months as I had too much in my savings account (it was money which my late parents left me to maintain the house which I had previously struggled to save up for then pay the mortgage and other bills). As I was doing voluntary work and had this money I signed off from the Jobcentre as no paid work was forthcoming. It lasted three years before I was persuaded by a friend to go back to the Jobcentre as my money was running low. I had a small part-time job for our church by that time, only a couple of hours per week, but it helped. I declared the job as I was being paid by cheque – I was horrified to find that my Jobseekers’ Allowance was Income Based as I hadn’t paid in N I during the previous two years! I was standing on my own two feet financially during that time and not claiming benefits!

    In 10 months’ time I will be about to retire and become an OAP – during that time will I really have to keep applying for full-time permanent work when the employers really need someone to give them longer service?

  9. Anon E Mouse

    Lynda Edwards – A friend of mine, a now unemployed plumber is in the same position so you are not alone…

  10. CVRepublic

    Jobseeker’s Allowance is worth less and harder to claim than ever before (Left Foot Forward) http://url4.eu/xu3v

  11. It’s on the Upswing — Randomness « DarcKnyt

    […] Jobseeker’s Allowance is worth less and harder to claim than ever before (leftfootforward.org) […]

  12. jack scott

    Its should not be forgotten the Tory party abololished the earning’s related benefit that was paid to people loosing their jobs for the first 6 months on claiming unemployment benefit in the early 80s,…..f++king misers.

  13. annoy

    why job center ask information that has nothing to do with job seeker allowrance?

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