{"id":113643,"date":"2025-10-09T09:30:00","date_gmt":"2025-10-09T08:30:00","guid":{"rendered":"https:\/\/en.econostrum.info\/uk\/?p=113643"},"modified":"2025-10-09T09:28:26","modified_gmt":"2025-10-09T08:28:26","slug":"uk-government-confirms-changes-benefits","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/uk\/uk-government-confirms-changes-benefits\/","title":{"rendered":"UK Government Confirms Massive Changes to Benefits Payments"},"content":{"rendered":"\n

The UK Government is preparing to implement a significant reform of the welfare system by merging Employment and Support Allowance (<\/em>ESA<\/em><\/strong>)<\/em> and Jobseeker\u2019s Allowance (<\/em>JSA<\/em><\/strong>)<\/em> into a single Unemployment Insurance (<\/em>UI<\/em><\/strong>)<\/em> benefit. According to the Institute for Fiscal Studies (IFS)<\/em>, the new system could yield savings of up to \u00a33 billion<\/strong> annually.<\/p>\n\n\n\n

This change, which was first proposed in a green paper<\/strong> published in March, aims to \u201cfix the broken benefits system\u201d by simplifying contribution-based support for those who are out of work. It would also introduce a fixed time limit to claims, replacing the current system where some benefits, particularly ESA, can be claimed indefinitely.<\/p>\n\n\n\n

Higher Benefit Rate, but Shorter Duration<\/strong><\/h2>\n\n\n\n

Under the proposed structure, the new UI payment would match the current ESA <\/a>weekly rate of \u00a3140.55<\/strong>, representing a 53% increase for jobseekers who now receive \u00a392.05<\/strong> on JSA. This move, according to the IFS<\/em>, would offer \u201cstronger income protection\u201d to those who have paid into the National Insurance system but are temporarily out of work.<\/p>\n\n\n\n

The trade-off comes in the form of time limits. UI would only be available for six or twelve months<\/strong>, depending on the version of the reform adopted. The six-month version would generate the highest estimated savings, around \u00a33 billion per year<\/strong>, mostly due to reduced expenditure on long-term claimants.<\/p>\n\n\n\n

\u201cMaking the new UI available for 12 months would still yield fiscal savings relative to the current system,\u201d said Martin Miklos<\/em><\/a>, a research economist at the IFS. He noted that most European countries provide unemployment insurance for 12 months or more, and the UK\u2019s current level of support is well below average. For instance, JSA is worth just 12% of the UK\u2019s mean wage, while the OECD average stands at 55%.<\/p>\n\n\n\n

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Stephen Timms has replied to my MP\u2019s concerns about time-limiting support group #ESA<\/a>. He says time-limiting it will \u2018encourage us back into work\u2019 and if we can\u2019t work, we should claim UC, so totally ignoring the point we raised that we\u2019re too sick to work and not entitled to UC.<\/p>— Amanda Bennett (@AmandaB55744931) October 7, 2025<\/a><\/blockquote>