Unemployment Insurance would replace JSA and ESA – it would be time-limited, although the Government has not said how long it could potentially be awarded for
Jobseeker’s Allowance (JSA) and Employment Support Allowance (ESA) will be merged into a new Unemployment Insurance benefit under a major overhaul of the welfare system. The proposal was announced today by Work and Pensions Secretary Liz Kendall.
Unemployment Insurance would be time-limited, although the Government has not said how long it could potentially be awarded for. Once the time-limited period ends, claimants who remain unemployed would need to apply for Universal Credit, subject to their personal circumstances.
Unemployment Insurance would be paid at the highest level you can currently get for ESA, which is £138.20 a week. People claiming this would be expected to actively seek work, but the Green Paper that was published today said there would be “easements” for those with work-limiting health conditions.
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Those with long term health conditions would also be able to claim other relevant benefits. You would need to have made National Insurance contributions previously in order to receive the new Unemployment Insurance. You currently need two to three years’ worth of National Insurance credits to put in a claim for JSA or ESA. Ms Kendall said: “So if you have paid into the system, you’ll get stronger income protection while we help you get back on track.”
JSA is awarded to people who are not currently working, or who work on average less than 16 hours a week, and can be claimed for up to six months. It does not have a health-related requirement, and so people claiming JSA are expected to be actively searching for work. ESA is awarded to people who have a disability or health condition that affects how much they can work.
Under current rules, you have a Work Capability Assessment (WCA) to determine if you should be placed into a work-related activity group or a support group. But it was confirmed today that the WCA for Universal Credit will be axed in 2028. This assessment helps place benefit claimants into one of two groups – Limited Capability for Work (LCW) or Limited Capability for Work and Work-Related Activity (LCWRA).
If you’re in the LCW group, you may be may be required to prepare to return to work in the future, while those in the LCWRA group are considered to have a health condition that is so severe, they cannot return to work anytime soon. The WCA will be replaced by the PIP assessment from 2028.
Meanwhile, Ms Kendall has announced plans to bring in a “permanent, above-inflation rise” to the standard allowance of Universal Credit. The Government says this equates to an annual increase of £775 in cash terms by 2029/30. Major changes have also been announced for PIP payments, which will make it harder for some people who need less help with daily activities to claim PIP.
The overhaul proposed today mean people will need to score a minimum of four points in one category to qualify for the daily living element of PIP. This won’t impact the mobility element of PIP. The Government has also announced plans for a comprehensive review of the PIP assessment process.
Ms Kendall told the Commons: “Going through the WCA is complex, time-consuming and often stressful for claimants, especially if they also have to go through the PIP assessment. And more fundamentally it’s based on a binary can-can’t work divide when we know the truth is that many people’s physical and mental health conditions fluctuate.
“The consultation on the Conservatives’ discredited WCA proposals was ruled unlawful by the courts. So today I can announce we will not go ahead with their proposals. Instead, we will scrap the WCA in 2028. In future, extra financial support for health conditions in Universal Credit will be available solely through the PIP assessment so extra income is based on the impact of someone’s health condition or disability, not on their capacity to work.”
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