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The Department for Work and Pensions is set to scrap jobseeker’s allowance (JSA) and employment support allowance (ESA). Instead, the DWP will create one unemployment insurance (UI) benefit. The Institute for Fiscal Studies (IFS) says the proposed changes could save between £2 billion and £3 billion a year. Former DWP Work and Pensions Secretary Liz Kendall said: “If you have paid into the system, you’ll get stronger income protection while we help you get back on track.” READ MORE Free bus passes could be extended to one group of under 66s The government proposes to introduce a new ‘unemployment insurance’ (UI) that would replace the existing working-age contributory benefits for those not in paid work, new style jobseeker’s allowance (NS JSA) and new style employment & support allowance (NS ESA). The new UI would offer time-limited support at the higher NS ESA rate, currently only available to those assessed to have work-limiting health conditions. Martin Miklos, research economist at IFS and one of the authors of the Green Budget report, said: “Contributory benefits in the UK, available to those who have previously ‘paid in’ and not means-tested based on household income, are a small but significant part of the overall social safety net. “Their design has been neglected for many years and it is high time they were modernised, not least so that they work better alongside the rest of the benefits system.” “Most European countries pay unemployment insurance benefits for 12 months or more,” he said. “Making the new UI available for 12 months would still yield fiscal savings relative to the current system.” Anvar Sarygulov, programmes manager at the Nuffield Foundation charitable trust, said: “Given the UK’s internationally low levels of support for the newly unemployed, there is a strong case for strengthening the level and duration of support offered to them through contributory benefits. “However, the Government needs to avoid pulling the rug out from under existing long-term claimants with health conditions by thinking carefully about the delivery and design of any transitional support.”
