Job Seeker's Allowance

From Academic Kids

In the United Kingdom Job Seeker's Allowance (JSA) is a form of unemployment benefit that is paid by the government to people who are unemployed and seeking work. It is part of the social security benefits system and is meant to cover the cost of living expenses in periods where the claimant is out of work. It is paid by the Department for Work and Pensions (DWP), normally through the local Job Centre.

There are two forms of Job Seeker's Allowance: Contribution-based Job Seeker's Allowance (CBJSA) and Income-based Job Seeker's Allowance (IBJSA).

Contributions are collected for the DWP by the Inland Revenue, who keep a permanent record of contributions paid by everyone in the UK that has a National Insurance number.

Contribution-based Job Seeker's Allowance

Contribution-based Job Seeker's Allowance is based on previous contributions that the claimant has made to National Insurance but may only be claimed by people who have made what are called Class 1 contributions. These are contributions that are made by employees and employers who are paid somewhere between a lower and upper limit (called the Lower Earnings Limit (LEL) and Upper Earnings Limit (UEL)), and not until their weekly salary rises above a threshold figure that is higher than the LEL. The LEL, UEL and threshold limits are adjusted at the beginning of each financial year.

Certain other benefits including Statutory Sick Pay, Statutory Paternity Pay, Statutory Maternity Pay, Statutory Adoption Pay, Incapacity Benefit, Bereavement Benefit, Carer's Allowance and Contribution-based Job Seeker's Allowance itself also count towards Class 1 contributions and are called "Credited Class 1 contributions".

Self-employed people do not make Class 1 contributions in their National Insurance, and thus may not claim Contribution-based Job Seeker's Allowance.

To be eligible to make a claim for Contribution-based Job Seeker's Allowance the claimant must first of all prove that they are actively seeking work and that they are available for work, and they must present themselves to their local Job Centre every fortnight to "sign on".

They must also have to have paid Class 1 National Insurance contributions on earnings of at least twenty five times the Low Earnings Level in one of the two complete financial years before the start of the claim year in which the claim is being made. They must also have to have paid Class 1 or Credited Class 1 contributions on earnings of at least fifty times the Low Earnings Level in both complete financial years before the start of the claim year in which the claim is being made.

In some cases a person's Class 1 contribution history may be protected if, for example, a parent decides to stay at home and look after their children while their spouse is at work. Each individual is only entitled to do this for a maximum of twenty years in their lifetime, and only if they are involved in a heterosexual relationship.

Income-based Job Seeker's Allowance

People who are not elligible for Contribution-based Jobseekers Allowance may claim for Income-based Job Seeker's Allowance, which is means tested for each individual claimant.

Both forms of benefit may only be paid if the claimant has less than 8,000 in savings (correct as of June 2004) and works less than sixteen hours a week.

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