Earlier history

Unemployment Benefit was first introduced in 1911 under the National Insurance Act 1911 to job seekers who had paid National Insurance contributions ("the stamp"). The maximum amount payable was seven shillings a week (equivalent to £38 in 2021).^[5] These payments were thus made only to people who had recently been in work, and not simply to those on low incomes. Furthermore, benefits were only paid for up to twelve months, by which time a claimant had to have regained work.

The Unemployment Insurance Act of March 1921 introduced a 'seeking work' test which required claimants to be actively seeking work and willing to accept employment paying a fair wage. In February 1922 a means test was introduced which excluded some, such as single adults who lived with relatives, from receiving benefit payments.^[5]

As a direct consequence of the return from war of injured servicemen,^[6][7] the Disabled Persons (Employment) Act 1944 was brought into force to enable these to secure employment.^[8][9]

After the Second World War, National Assistance was introduced by the National Assistance Act 1948, allowing anyone of working age on a low income to apply for support.

National Assistance was replaced by Supplementary Benefit in November 1966, and Unemployment Benefit claimants could transfer to this after their initial entitlement had expired. Supplementary Benefit was later replaced by Income Support in April 1988.

Legislation

In 1995, legislation was passed through the House of Commons entitled the Jobseekers Act 1995.^[10][11] The Jobseeker's Allowance Regulations 1996^[12] were produced within a period of six months from the act coming into force, with the change of Income Support provision to Jobseekers Allowance occurring on 7 October 1996.^[13][14] Previously, on 11 September 1996, the Social Security (Credits and Contributions) (Jobseeker's Allowance Consequential and Miscellaneous Amendments) Regulations 1996^[15] were created, brought before parliament five days later and subsequently made policy coming into force also on 7 October.

The change was introduced to streamline the systematic administration of benefits by improving claimant compliance and to partially remove the distinction between means-tested claimants and those claiming against contribution records.^[16]

Subsequent legislation

This article may be confusing or unclear to readers. (July 2014)

in April 2011 Iain Duncan Smith introduced a period of mandatory work activity amounting to a maximum of four weeks of thirty hours each week in employment. It was expected this activity would be required of approximately 10,000 individuals. The main claimants who it was expected would be subject to mandatory work activity were those who had been 'signing on' for at least thirteen weeks. Despite this any recipient of Jobseeker-benefit could be required to take part in work activity regardless of how long that person had been 'signing on'.^{[17][better source needed]}

At some time the Social Security Advisory Committee felt a need for an initiative so the Employment Skills and Regulations Scheme was considered. The governmental bodies had a look at the ideas and felt they were not altogether correct. So the government only accepted the need for two-thirds of the total of changes suggested.^[18] In 2011 the Jobseeker's Allowance (Employment, Skills and Enterprise) Regulations were brought into force. One part of the scheme required the long-term unemployed to participate in unpaid work activity for a maximum of six-months.^[19][20]

Contribution-based

New-style (contribution-based) Jobseeker's Allowance (JSA(C)) entitlement is based on Class 1 National Insurance contributions in the two complete tax years preceding the benefit year of claim. This allowance is paid regardless of assets;^[37] however, any personal or occupational pension over £50 a week would result in deductions. There were also other caveats (related to job-seeking activity) which excluded payment.

Many older citizens seeking work could not receive payments, despite qualifying through NI contributions, because they had pension income. Self-employed people do not pay Class 1 contributions, and may not have been able to claim JSA(C) until their case had been decided. However, they were both still eligible for NI credits (see below).

JSA(C) may be claimed for only 26 weeks in any benefit year. In order to make a claim, a customer must have actually paid NI contributions for the same number of weeks in one of the last two tax years (the remaining 18 months could be either paid, or credited contributions). When entitlement to JSA(C) is exhausted, Universal Credit may then have become payable if eligible (see below).

Certain other benefits including Statutory Sick Pay, Statutory Paternity Pay, Statutory Maternity Pay, statutory adoption pay, Employment and Support Allowance, bereavement benefit, Carer's Allowance and JSA(C) itself also counted towards Class 1 contributions and were called "Credited Class 1 contributions".

If there was no entitlement to Universal Credit, a person could re-qualify for JSA(C) in a subsequent benefit year based on contributions paid in the relevant contribution years, providing that there had been a break of at least twelve weeks. They had to wait until the beginning of a new benefit year before they could claim again.

Income-based

People who were eligible for JSA(C) could also claim JSA(IB) for any additional payments due under that benefit (for family dependents, for example). JSA(IB) was payable only if the claimant had less than £16,000 in capital (correct as of May 2022). Payments are reduced if the claimant has savings between £6,000 and £16,000.^[36]

Both forms of benefit faced 100% marginal deductions if the individual earned more than a small amount – the 'disregard' – which was £5 per week for single people, £10 per week for couples and £20 per week for certain other groups such as some lone parents and disabled people. The 'disregard' remained at the same nominal amount since the 1980s and was never uprated with inflation, unlike benefits themselves. The benefit was withdrawn from those working 16 or more hours a week (though this did not apply to voluntary work).^[38] Part-time students could claim provided they did not have more than 16 hours a week in teacher contact time and the course was not officially designated as full-time by the college (irrespective of the number of hours of contact time).

New Deal

Starting in 2001, the New Deal introduced a second stage to the claim period. Initially, there was the jobseeker's agreement and allowance. If a claimant who was below the female state pension was unemployed for over twelve months, they were placed on the New Deal scheme. They may also have entered the New Deal process early if they fell in special categories. From 2009, a Flexible New Deal scheme started using the private sector to provide tailored employment and skills support, with return-to-work performance incentives for the providers.

In Northern Ireland the New Deal was replaced in 2008 by a similar scheme known as Steps to Work. This scheme was administered by the Department for Employment and Learning which operates Jobs & Benefits Offices jointly with the Social Security Agency.^{[citation needed]}

During October 2009 the New Deal programmes were replaced by the Flexible New Deal programmes, which were available to claimants still unemployed after a period of twelve months.^[27]

The Work Programme

Various work programmes, under the collective label of "New Deal" (including Flexible New Deal, New Deal for Young People, New Deal 25+, New Deal for Disabled people, New Deal for Lone parents, Pathways to Work, Progress2Work and Employment Zones), were replaced by The Work Programme during June 2011.^[39] On 6 March 2012 the UK Government announced benefits changes for prisoners at the end of their sentence and those claiming JSA. They would be sent on the work programme, as would JSA claimants who had been claiming for the previous 26 weeks. On the work programme they were required to sign a form to agree to 30 hours a week of unpaid work or face sanctions of 6 months.^[40] Unlike New Deal there was no choice of training or help setting up a business, nor could the job seeker choose what type of unpaid work they did. In nearly all cases the unpaid placement involved shop work.^{[citation needed]} From 2012, work placement advisors would receive £5,600 should they find work for a person leaving prison who keeps the job for two years.^[24][41] According to the Government, from June 2011 only 1 in 5 participants in the Work Programme remained off benefits for over six months.^[42]

Criticism of sanctions

Sanctions have been found to be ineffective in getting claimants into work but do great harm to the claimants, especially to disabled claimants who are disproportionately targeted with sanctions.^[47]

The charity Oxfam oppose what they consider unfair sanctions:

We [Oxfam] have spoken to people who have had delays and sanctions for mundane reasons, such as not having the right ink to fill an application or missing appointments due to sickness which is unacceptable. Any sanctions system needs to operate in a way that does not push people further into poverty. People need support not punishment. They need understanding not condemnation.^[45]

The Guardian has listed ten cases of stopped benefits which it regards as either for "trivial reasons" or due to DWP "administrative errors". The former included three people who were in hospital due to their own sickness or attending a sick partner and a person who went for a job interview instead of attending the job centre. The latter included letters sent by the DWP to the wrong address and people who arrived on time at the job centre but found an unusually long queue.^[48] The Independent cited a man who had a heart attack during a work capability assessment and was sanctioned for not completing it.^[49] Two cases show reasonably foreseeable consequences for sanctioned diabetic claimants: one resorted to begging for food,^[50] whilst another who was apparently unable to afford to keep his insulin properly refrigerated was found dead, leading to a parliamentary select committee investigation of sanctions.^[51] In the last quarter of 2013 there were 227,629 claimants sanctioned, a rise of 69,600 compared to the equivalent time in 2012.^[52] Over a million British claimants were sanctioned between October 2012 and December 2013. 633,000 got their benefits back after referral and 580,273 referrals were cancelled.^[52] Even when benefits are restored on appeal the stress sanctions cause can worsen mental health.^[53]

Paul Jenkins, chief executive of the Tavistock and Portman NHS Foundation Trust, who previously worked for Rethink Mental Illness, criticised the reintroduction of sanctions, which were suspended in March 2020 because of the COVID-19 pandemic in the United Kingdom. He said benefit sanctions policy was "really cruel and ineffective".^[54]