Letter regarding benefits

[MrMister]

Whats does it mean if "your JSA based on National Insurance Contributions will soon run out.."

I assume the benefits will not stop, can anyone explain further ?

[Buenchico]

If your recent National Insurance contributions are up to date when you 'sign on', you receive 'contribution-based' JSA. It's not means-tested, so you get it irrespective of whether you've got savings and whether or not your partner (if any) has any income.

Contribution-based JSA lasts for 6 months. Thereafter, those who are eligible for it will receive 'Income-based' JSA. The difference is that it's means-tested. If you've got more than £16,000 in savings you won't get any money. If you've got £6,000 and £16,000 in savings, you'll lose benefit on a sliding scale. (If you're living with a partner, it's your joint savings which are relevant). Similarly you'll lose money if your partner has an income (unless it's very small). If your partner is in full-time employment you'll almost certainly get nothing at all.

The only part of income-based JSA which isn't affected by savings or your partner's income is your National Insurance contributions, which will continue to be paid even if you don't actually receive any money.

So, if (like me) you're single and with no savings, you'll notice no difference when your contribution-based JSA runs out. You'll simply get income-based JSA (at exactly the same rate) in future. [There are actually some advantages to switching to income-based JSA. For example, you qualify for free NHS prescriptions].

However if you've got a partner in full time work you'll get nothing (other than your NI contribution) in future.

Chris

[Buenchico]

I've just noticed a word missing in my post above. The relevant sentence should start: "If you've got between £6,000 and £16,000 in savings . . ."