Types of Unemployed Benefits in the UK

As of December 2022, the employment rate of UK citizens aged 16 years and above stood at 75.6%. As of January 2023, the number of unemployed citizens stood at 1.3 million.

If you are among the 1.3 million unemployed people, there are several benefits you can use to your advantage to lessen the cost of living. This guide will discuss unemployment benefits, the different types of benefits, and how they can help people cope financially while unemployed.

What are Unemployment Benefits?

Unemployment benefits are a form of payment made by the government to help unemployed people cope financially.

The type of unemployment benefit offered will differ from one country to another. In some countries, the payments are made to cover basic costs such as food and shelter. In some cases, these costs are made to help unemployed people to find work and reduce the tax burden.

When to Claim Unemployment Benefits

Unemployment benefits are best claimed if your an unemployed. To be considered unemployed, the applicant must be over 16 years of age and prove that they are actively searching for a job.

However, it is essential to note that if the applicant voluntarily resigns from a job, they may not be eligible to receive benefits. Unemployment benefits also apply if:

Your Income is Low

You are entitled to unemployment benefits if your current income is low. This mainly applies to applicants who work part-time instead of full-time. A job is considered full-time if the applicant can work for at least 40 hours a week.

Applicants who work less than 16 hours a week are considered job seekers and can qualify for a jobseeker's allowance.

If You Are Temporarily Unable to Work

Job seekers are qualified for unemployment benefits if they are temporarily unable to work. This can be caused by several factors, such as when one is involved in an accident or is sick.

Though an employer should make statutory payments when the employee is sick, they can only be made for up to 28 weeks. After this, the employee is on their own. To help cope with this financial problem, the employee can apply for an unemployment benefit.

Types of Unemployment Benefits

One of the most common types of unemployment benefits is Universal Credit. Universal Credit is a form of payment that helps citizens cope with the cost of living. It is a monthly payment, but it can sometimes be paid out twice a month for some Scottish residents.

It is important to note that Universal Credit payments are replacing benefits and tax credits such as

  • Housing Benefits
  • Child Tax Credits
  • Income Support
  • Working Tax Credit

To be eligible for Universal Credit payments, the applicant must meet the following criteria:

  • Be out of work
  • Unable to work
  • Be self-employed or work part-time
  • Live in the UK
  • Be aged 18 years or over
  • Have no more than £16,000 in money, savings and investments

Jobseeker's Allowance

A jobseeker's allowance is an unemployment benefit given to underemployed or unemployed people. Initially, there were two types of job seeker allowance. However, income-based job seekers' allowance was discontinued by the government.

If you are still getting income-based JSA, this will continue until your claim ends.
The second type of job seeker's allowance available is the New style job seeker's allowance.

This type of allowance is suitable for individuals who are unemployed or work less than 16 hours a week.

New Style Jobseeker's allowance, is a fortnightly payment that can be claimed alongside Universal Payment. To get a New Style Jobseekers allowance, the applicant must have made enough National Insurance Contributions or gained enough National Insurance Credits.

Applicants who qualify for a New Style JSA can get payments for up to 182 days. Unlike Universal Credit, you can Get New Style JSA if you have savings over £16,000.
New Style JSA does not include an additional amount for housing costs or any amounts for children.

Employment and Support Allowance {ESA}

This type of allowance is suitable for people living with disability or health conditions that affect their income. The ESA provides money to help with living costs or to support people with disability to get back to work.

To qualify for ESA, the applicant must be under state pension age and have a health or disability condition. Other qualifications include the following:

  • The applicant must have been an employee or worked as self-employed
  • The applicant must have enough National Insurance Contributions

It is important to note that you can't get ESA benefits if you already get Statutory Sick Pay benefits or a Jobseeker's Allowance. However, applicants can still get ESA benefits if they get Universal Credit. The government will, however, reduce the amount of Universal Credit Payment by the amount paid through the ESA program.

Housing Benefit

Housing benefit was created to help unemployed citizens pay their rent. This benefit only applies to citizens who have reached state pension age or live in temporary housing. The benefit also applies to people who

  • Live in temporary accommodation such as B&B
  • Live in a refuge for survivors of domestic abuse
  • Live in supported housing such as hostels

You do not qualify for housing benefits if:

  • You have savings of over £16,000
  • You pay mortgages on your own
  • You already have Universal Credit
  • You live with a partner who is claiming Housing Benefits
  • You are an asylum seeker, or are sponsored
  • You are a Crown Tenant

In conclusion, there are numerous benefits for unemployed people living in the UK. However, most of these benefits are being phased out with the introduction of Universal Credits. Some unemployment benefits in the UK include Employment and Support Allowance, housing benefits, and New Style Jobseeker's Allowance.

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