£20 per week extra for new unemployed - Labour

Tue, 21/01/2014 - 12:57 -- nick

Labour will top-up Jobseeker's Allowance (JSA) by £20 each week for those who have paid National Insurance for at least five years before becoming unemployed.

Rachel Reeves, Labour's work and pensions spokesperson, followed yesterday's confirmation of her party's policy of linking benefits to contributions by outlining an amount for the increase, should her party win the 2015 election.

She told think tank the IPPR:

"I would like to see that if someone who has contributed for four or five years, for example, in the first few weeks – perhaps in the first six weeks as with statutory maternity pay – they might get a bit more.

"Perhaps in the order of £20. Before I make a firm commitment we need to make that the sums add up. [Shadow chancellor] Ed Balls has been very clear that any commitments have to be cost-neutral. We won't be spending any more on day to day spending."

JSA is set at £71.70 per week, and the top-up would see that lifted to £91.70 at today's rate, closer to a liveable amount.

Currently someone who has paid NI contributions gets the same weekly benefit amount as someone who has never paid in, but they do not have their partner's income or savings taken into account for the first six months of their claim.

The UK currently has the lowest benefits in Western Europe - 20th of the 26 EU countries - and is the only country in this area not to link unemployment benefits to previous earnings.

There will be concern that the 'cost-neutral' promise means other claimants will see their incomes go down, even given the poverty they already face.

Around half of unemployed people get work within three months of losing their jobs, and the majority have worked previously, meaning hundreds of thousands of people could potentially be in line for the extra payment each year.

If 200,000 people claimed the top up for six weeks, the total bill would be £24 million each year.

Reeves made a name for herself by threatening to make her party "tougher than the Tories" on benefits when she was appointed in October last year, threatening further hardship on unemployed people.

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