NI payers to get higher unemployment benefits under Labour

Mon, 20/01/2014 - 14:48 -- nick

The Labour party has promised to restore the contributory principle to unemployment benefits.

Those who have paid National Insurance as part of their previous salary will be entitled to higher benefits than those who have not.

This proposal would bring the UK into line with most of the rest of Europe, which sees benefits linked to previous pay.

Announcing the policy, Labour's work and pensions spokesperson Rachel Reeves said that those who had paid NI through work for four or five years would be entitled to higher Jobseeker's Allowance (JSA) for the first six weeks of their claims.

Reeves told the Guardian: "On contributory. Are we unequivocal? I will give a very straight answer. This is unequivocal. We are moving in the direction of restoring that contributory element in our social security system."

She added: "A higher rate of Jobseeker's Allowance paid for the first six weeks of unemployment to those who have lost their jobs after perhaps four or five years in work could be a big help in cushioning the immediate financial impact of redundancy and give them a better chance of getting back into work and back on their feet sooner."

There is some limited benefit to having paid NI currently; for the first six months, a claimant's savings and their partner's income are not taken into account when they start to get JSA, although the rate at which it is paid is the same as for those who have not paid NI.

Contributions-linked benefits would in normal circumstances be expected to raise costs.

However, the proposal is being put forward on the basis that it will not increase the overall benefits bill, meaning Labour may be announcing other cuts to compensate.

Reeves has been in post since last year, when she announced her arrival by saying she would make the Labour party "tougher than the Tories" on welfare.

She did not say what would happen after the six weeks of higher payments were up, or whether the recognition of those who had worked would extend to suspending sanctions for any period.

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