DEFINITION of Jobseeker's Allowance (JSA)
The Jobseeker’s Allowance (JSA) is a benefit which is available to unemployed individuals in the U.K. who are actively seeking work. JSA is intended to help minimize the costs of living for those currently seeking full-time employment, and the benefit may also be available to people who are working less than 16 hours per week.
Also referred to as "the dole."
BREAKING DOWN Jobseeker's Allowance (JSA)
One of the premises of the Jobseeker’s Allowance (JSA) is that it is a condition-based benefit, meaning that recipients must continue to meet certain conditions on an ongoing basis in order to retain their eligibility for payments. The main condition for receiving the JSA is that the recipient must provide proof on a regular basis that they are in fact, actively looking for employment. This condition was introduced to avoid a situation where people become too comfortable in their unemployed status and unmotivated to find work due to the easily available and accessible unemployment benefits.
Precursors to the Jobseeker’s Allowance
Condition-based unemployment benefits in the U.K. date back to 1921, when a ‘seeking work test’ was introduced into the system. The work test required that people claiming benefits had to show that they were genuinely seeking employment and were willing to accept any job paying a reasonable wage.
The first unemployment benefits were paid in 1911, and were based on National Insurance Contributions. The benefits were paid for a maximum period of one year, and were available only to those who had been recently unemployed.
In 1920, the Unemployment Insurance Act created weekly cash unemployment benefits which were made available to 11 million workers for a period of 15 weeks during a time of a very high unemployment rate.
Unemployment benefits have continued to evolve over the years, leading to the current Jobseeker’s Allowance (JSA).
Eligibility for JSA
The Jobseeker’s Allowance is available to an individual under the State Pension age, which is the earliest age a person can start receiving his pension, and is based on gender and birth date. To qualify for JSA, the claimant must be above 18 years old, although there are some situations where 16 or 17-year olds may be eligible.
The claimant must be out of full-time work, but actively seeking a job or contract. The JSA recipient must “sign-off” at Jobcentre Plus every two weeks, allowing the Jobcentre to assess whether sufficient efforts are being made to secure employment. Benefits may be stopped if the Jobcentre determines that the claimant is not fulfilling his or her job seeking obligations, is failing to attend interviews, or is turning down offers of employment or training.
There are two types of Jobseeker’s Allowance: the National Insurance Contributions (NIC) and Income Based JSA. With the NIC, if sufficient contributions have been paid over the preceding two years, a contributions-based Jobseeker’s Allowance can be claimed for a period of 182 days (26 weeks). If adequate contributions have not been made, the jobseeker may apply for an Income Based Job Seeker’s Allowance.
Eligibility for the Income Based JSA depends on certain criteria, such as: the claimant working no more than 16 hours per week, having no more than £16000 in savings, and the claimant's partner working no more than 24 hours per week. If the claimant has savings of over £6000, the allowance they are entitled to will be a portion of the full amount.