UK to merge benefits into Unemployment Insurance program

The UK government is planning significant changes to its welfare system. A new Green Paper has been released following a major announcement from Work and Pensions Secretary Liz Kendall. Two current benefits, Jobseeker’s Allowance (JSA) and Employment Support Allowance (ESA), will be merged into a new benefit called Unemployment Insurance. This insurance will be time-limited, but specific duration details have not yet been provided. Unemployment Insurance will be paid at a rate of £138.20 a week. To receive this benefit, people must have previously made National Insurance contributions. Once the time-limited insurance ends, those still unemployed may need to apply for Universal Credit. While claiming Unemployment Insurance, individuals are expected to actively seek work. However, there will be reduced requirements for those with health conditions that limit their ability to work. The current Work Capability Assessment (WCA), used to determine eligibility for certain benefits, is set to be eliminated by 2028. This assessment currently places claimants into groups based on their ability to work. Kendall announced a new health component for Universal Credit that will be available for those aged 22 or older who receive Personal Independence Payment (PIP). She also proposed a permanent increase to Universal Credit allowances, expected to raise the amount by £775 by the year 2029/30. Changes to PIP payments were also revealed. Claimants will need to score at least four points in one category to qualify for daily living support. However, the requirements for the mobility element will remain unchanged. Kendall emphasized the need for simpler processes for claimants and acknowledged the stress currently associated with these assessments.