Contribution-based Jobseeker's Allowance and private/occupational pensions
Contribution-based Jobseeker's Allowance is a benefit for unemployed people with a sufficient record of National Insurance contributions. It is not means-tested as such, but the amount of contribution-based JSA payable is reduced on a pound for pound basis by any regular income the claimant receives from an occupational or private pension in excess of £50 a week.
Jobseeker’s Allowance (JSA) is a benefit for people who are unemployed and looking for work. There are two types of Jobseeker’s Allowance: contribution-based JSA, which is payable for up to six months if the person has a sufficient National Insurance record; and income-based JSA, which is means-tested.
Income-based JSA may be payable after the person has exhausted their entitlement to contribution-based JSA, or from the outset of the claim, if the person doesn’t qualify for contribution-based JSA. A person may also get contribution-based JSA with a “top-up” of income-based JSA, depending on their income and other circumstances.
How other other and income and resources can affect JSAIncome-based JSA may be affected if the claimant (and/or any partner) has other sources of income, or capital in excess of a certain amount. An occupational or private pension would reduce entitlement to income-based JSA on a pound for pound basis.
Contribution-based JSA and pensionsContribution-based JSA is not means-tested as such, but the amount of JSA payable is reduced on a pound for pound basis by any regular income the claimant receives from an occupational or private pension in excess of £50 a week. At current JSA rates (£73.10 a week from April 2015), contribution-based would therefore be withdrawn completely from those with pension payments totalling £123.10 a week or more.
Origins of the "abatement" rulesThe abatement of contributory unemployment benefits for people receiving occupational pensions over a certain level was introduced from April 1981, and originally only applied to those aged 60 or over. The then Government cited the need to make savings in the social security budget, and its belief that those who had effectively retired after a pensionable career could not be said to be “unemployed” in the usual sense of the word. The age limit was reduced to 55 in 1988.
The abatement rule was carried over to contribution-based JSA when it replaced Unemployment Benefit in 1996, but the provisions were extended to cover those receiving personal pensions, and the age limit removed. The threshold was also increased from £35 to £50 a week, where it has remained ever since.