What’s the Difference Between Income and Contribution Based JSA? Benefits

A question that we often see arise from people that get in touch is the difference between Contribution and Income Based Job Seeker’s Allowance. Not only that, but with the introduction of Universal Credit, people are now also looking for advice on ‘new style’ JSA. Here at BBO, we’re committed to helping our users to understand their finances and the benefits that they may be entitled to. In order to do that, we’ve put together the following guide.

What is the Difference Between Income and Contribution Based Job Seeker’s Allowance?

When it comes to Job Seeker’s Allowance, there are three different types. These are

  • Income Based JSA
  • Contribution Based JSA
  • ‘New Style’ JSA

We’ll come to discuss the latter in more detail later in this article, but for now we’ll be focusing on the top two. Income Based JSA is made available to those who haven’t paid enough Class 1 National Insurance contributions to apply for contribution based JSA. However, for contribution based JSA, you must have contributed enough Class 1 National Insurance contributions to be entitled to it.

You may turn to income based JSA if you were self employed when your contribution based JSA stopped. Another of the key differences between Income Based and Contribution Based JSA is that for the former, you can continue to be paid for as long as you meet the rules. Contribution based JSA is capped at 182 days.

The similarity between these two benefits is that the majority of people can no longer make new claims for them. This is as a result of Universal Credit being rolled out across the UK.

How Did Universal Credit Change JSA?

Since the launch of Universal Credit across the country, it’s now become impossible to make a new claim for income and contribution based Jobseeker’s Allowance unless you receive a Severe Disability Premium. As a result, you will most likely have to submit a claim for Universal Credit instead. This may also be necessary if you experience a change in your circumstances such as changes in your employment, family or moving home.

It’s important to note that if you do make the move from income based or contribution based JSA to Universal Credit, you will automatically continue to get the amount of money that you currently receive, as long as you’re still eligible.

What is ‘New Style’ JSA?

We have gone into depth when it comes to explaining ‘New Style’ JSA in our knowledge hub guide devoted to it. However, in order to give a brief overview, it is a fortnightly benefit that aims to support you financially whilst you’re looking for work. In order to be eligible for it, you need to have worked as an employee in the past, and paid Class 1 National Insurance contributions, usually in the last 2 or 3 years.

You will also need to:

  • Be 18 or over (although some exceptions can be made for those over 16 or 17)
  • Be under the State Pension Age
  • Not be in full-time education
  • Be available for work
  • Not be working at the moment, or be working less than 16 hours per week on average
  • Not have an illness or disability stopping you from working
  • Live in England, Scotland or Wales
  • Have the right to work in the UK

One reason that many people opt to apply for ‘new style’ JSA is that your partner’s income and savings aren’t taken into account when making your claim. Once the claim has been approved, you can receive it for up to 182 days, but you will be expected to take reasonable steps to look for work. Following this period, your work coach will be in touch to discuss options.

Contact BBO for JSA Advice

If you have any further questions regarding Job Seeker’s Allowance, please contact us. Here at Building Better Opportunities, our friendly and experienced team are dedicated to supporting individuals, couples and families throughout Stafford and Staffordshire with their finances, employment status and wellbeing. You can get in touch with our advocates in two ways, by either giving us a call or attending one of our drop-in sessions.

As mentioned above, you can also check out our blog for more articles regarding Job Seeker’s Allowance. For example, you may be interested in ‘How Much Can I Earn Before My Job Seeker’s Allowance Is Affected?‘