Should I sign up for Jobseeker’s Allowance (JSA)?

Should I sign on for Jobseeker's Allowance?THE PROS AND CONS OF SIGNING ON AFTER GRADUATION

Are you struggling to find work, running out of cash – and considering claiming Jobseeker’s Allowance (JSA)? Many graduates never expected to find themselves needing financial help after university – so it can be a tough decision to make. Guest blogger Lizzi Hart, marketing executive at the Graduate Recruitment Bureau, weighs up the pros and cons of signing on…

CAN YOU CLAIM?

Before we look at both the pros and cons of Jobseeker’s Allowance, let’s clear up what is – and who can claim. There are two types of Jobseeker’s Allowance – contribution-based and income-based, as well as the ‘new style’ JSA known as Universal Credit that is gradually being introduced.

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Contribution-based JSA is a temporary (up to 6 months) allowance for those who have paid enough Class 1 National Insurance tax over the last two years (so if you’ve had a full-time job for the duration of this time).

Income-based JSA is means-tested, so claimable for those who haven’t paid enough NI tax, and are on low income or unemployed with little or no savings. This is also applicable for part-time higher-education students. You have to be over 18 to apply (though there are some exceptions for 16 and 17 year olds), and you’ll receive more of an allowance depending on age, marital status and dependents. Weekly allowances start at £57.90. For more information, visit: https://www.gov.uk/jobseekers-allowance

Universal Credit is for those who are unemployed or on a low income. UC is paid once a month rather than fortnightly, it can incorporate help with housing costs, and there is no limit on the hours you can work whilst receiving UC. With UC, your benefits will gradually decrease the more you earn, rather than stop altogether. More details here: https://www.gov.uk/universal-credit/overview

Unfortunately, you can’t claim JSA if you’re doing an internship, even if it’s unpaid. That’s because you aren’t available to go to interviews for other jobs, or to do other paid work you might be offered.

GRADUATE FOG CLASSIC! This super-popular post was first published in May 2014 and has been updated recently for accuracy

WHY SIGN ON?

1) The extra money comes in handy. It’s not a long term solution, but whilst you are in-between jobs, an extra £231.60 a month can give you some extra cash to live on. The below benefits apply to those claiming income-based JSA.
2) Free prescriptions. There are many benefits of being on JSA such as free prescriptions and free dental care through the NHS. If you have children, they’ll get free school meals and travel, plus a large reduction off of school trips.
3) Discounted council tax. You could get up to 100% discount on council tax (depending on where you live) and access to free legal advice.
4) A clothing allowance for job interviews. It won’t buy you an Armani suit, but it’s better than nothing!
5) Routine. You are required to look for work, and by doing this, you can get yourself into a routine.
6) National insurance credits. Whilst you aren’t paying National Insurance tax, you can fill in the gaps with National Insurance credits, an automatic add-on if you receive JSA. This means that your state pension and bereavement benefits for your partner won’t be affected if you are not able to pay enough tax.

WHY NOT SIGN ON?

1) It isn’t that much money. Unless you’re living with your parents, you’ll still need to apply for housing benefit to help out with rent.
2) You have to visit the job centre every two weeks to ‘sign-on’ (though you should be able to receive travel expenses depending on where your nearest centre is).
3) Stigma. There is no reason to feel this, but some claimants are ashamed of signing on. One told me recently that “It’s degrading and certainly something I’d rather not have to do.” If you feel like that, remember that nobody else needs to know that you’re claiming.
4) Pressure to look for jobs outside your chosen sector. One claimant told me: “The staff at my local job centre don’t care about my situation. They see my age and try and push me into anything to get me off their list”.

ANYTHING ELSE?

Remember what JSA is there for. It is designed to relieve some of the monetary-based stress involved in a short employment gap, leaving you more time to focus on planning your next career move. It is just temporary, so try not to lose sight of this – and good luck!

*HAVE YOU EVER CLAIMED JSA?
What were the benefits – and were there any down-sides? If you’re eligible but aren’t claiming, what’s stopping you? Have we missed anything from the list above? Have your say below…

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