The Jobseeker's Allowance has arrived. And what a nasty, mean spirited piece of legislation it really is.
We do not exaggerate by saying that JSA will hurt children and young people. It will undermine the family. It will penalise the thrifty. It will force the jobless to take very low paid work. It will cause widespread hardship. And - as our ‘Handbook update’ pages reveal - the internal Employment Service guidance manuals show just how aggressively the JSA will be implemented.
So what's the beef? Firstly, the Government is tearing up a contract between taxpayers and State. National Insurance contributions are like any other insurance: you pay the premium and you expect the benefits. Now the Government is changing the rules and has halved the period of benefit. This makes Britain the stingiest country in Europe for contributory unemployment benefit: it takes longer to qualify; the payment is unrelated to previous earnings; and it’s paid for the shortest duration. Don’t forget that most working people now pay National Insurance contributions on 10% of their gross earnings.
Employment Minister Eric Forth MP justifies the JSA saying it will protect the taxpayer by striking a deal between claimant and Government. But there has always been a deal: jobless claimants should look for work, be available for work and accept reasonable job offers. The JSA regime goes much further: it will make claimants engage in pointless, ‘cosmetic’ jobsearch activity; they will have to accept very low paid jobs and travel longer distances for work; they will be expected to apply for jobs irrespective of their skills, qualifications or experience.
Forth also says there will be "winners and losers". He is wrong. There are no winners under JSA, only losers.
Five out of six new claimants will be hit as every newly unemployed person - and their families - will now have to ‘wait’ for 3 days before getting a penny of benefit. A couple with 2 young children effectively lose £46 in the first week of unemployment; the Government will save £40m a year.
Over the longer term, about a quarter of a million people will be worse off, like childless couples who lose £2.80 a week. Or under 25 year olds, for whom even the contributory benefit is cut by £10.35 a week - the Government disengenously describes this as 'realignment' to match the lower rates under Income Support. 70,000 people will get no benefit at all, as the means-test kicks-in after 6 months unemployment and their savings or a working spouse disqualifies them.
It is no surprise that the Benefits Agency has been hit by staff protests. JSA could prove to be a health hazard. Staff are due to transfer into open-plan Employment Service (ES) offices and fear the reaction of claimants to the 3 day waiting period or the impact of referral to adjudication.
More significantly, claimants are going to be penalised for failing to meet the new stringent tests of active job seeking and availability. Single claimants and childless couples will rarely qualify for ‘hardship’ payments and will be left without any income for up to 2 weeks. The new JSA powers mean disqualifications are likely to increase.
Firstly the Jobseeker’s Agreement requires a claimants to say how many times a week they intend to: write to, visit and telephone employers, contact the Jobcentre, register with agencies, ask family, friends and former workmates and look in (named) newspapers and trade journals. The form offers a further 9 blank lines to list ‘other activities'.
Secondly, as Iain Murray outlines on page ? of this issue, the Jobseeker’s Direction will be used to make claimants apply for part-time jobs - and this goes against the spirit of all the Government’s pledges during the course of the legislation. In a Kafkaesque twist of logic, a claimant may still legitimately decline the offer of a part-time job, they can be penalised for not applying for it in the first place.
The scope for disqualification is considerable. Don’t forget, this year the Employment Service has a target of 215,000 referrals to adjudication (over-zealous management action led to last year’s target being over-achieved by almost 90,000). As 87% of all referrals now lead to disqualification, this is tantamount to ‘front-line’ summary disqualification for roughly 1 in 16 of all claimants in a 1 year period.
So there are going to be some pretty angry claimants who are put in this position.
There are alternative approaches to the unemployed. As Tom Bewick describes on pages ? to ? Denmark has one of Europe’s lowest unemployment levels and one of the most ‘generous’ systems of unemployment benefits. Denmark is not insulated from the idea of an ‘active benefit’ system. But their regime treats the unemployed with respect. It reflects a consensus that unemployment is bad for everyone and that jobless people should have a real insurance against the catastrophic collapse of income that hits Britain’s unemployed.