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Should unemployed Graduates sign up for Jobseekers Allowance (JSA)?

• October 06, 2020

The Government has explained the rules of its new Kickstart Scheme to help Universal Credit claimants get a job.

The scheme aims to create hundreds of thousands of six-month work placements aimed at those aged 16 to 24 who are currently receiving the benefit. As of July, there were almost 538,000 young people aged 24 and under on Universal Credit.

Many young people who struggle to find jobs after graduating consider signing on for Jobseekers Allowance (JSA). JSA is a financial benefit provided by the government to people who are either not in employment or working a small number of hours.

There are two benefits that are available:

• ‘New Style’ JSA
• Universal Credit

New Style JSA

The New Style JSA is provided for up to 6 months to those who have been employed and paid enough Class 1 National Insurance over the past 2-3 years. Other eligibility criteria are as follows:

• Aged 18 or over
• Not in full-time education
• Unemployed or working less than 18 hours a week
• Actively searching for work
• Rights to work in the UK

JSA is usually paid every two weeks. The maximum amount you could receive per week is as follows:

• Aged 24 or under: £58.90
• Aged 25 or over: £74.35
• Couples over 18: £116.80 per couple

Universal Credit

Universal Credit was introduced in 2013 and is a payment provided to those over the age of 18 who are out of work or on a low income. To claim you must be:

• Aged 18 or over
• Out of work (or on a low income)
• Living in the UK
• Have less than £16,000 in personal savings

With Universal Credit there are no limits on the hours you can work, unlike JSA. However, the more you earn, the more your payment reduces.

Universal Credit is usually paid on a monthly basis. The maximum amount you can receive per month is:

• Under 25: £342.72
• Over 25: £409.89
• Couple under 25: £488.59 per couple
• Couple over 25: £594.04 per couple

There are both pros & cons when considering making a claim for either.

Pros:

• The extra money comes in handy
• Free prescriptions and free dental care through the NHS
• Discounted council tax
• Discounted travel
• National Insurance credits

Cons:

• It isn’t that much money
• You have to meet with a Job Centre coach every two weeks to sign on
• The stigma that might come with applying
• Pressure to apply for jobs outside your sector

The New Style JSA can be claimed alongside Universal Credit. If you apply for both, the JSA amount you are eligible for will be deducted from the Universal Credit amount you receive.

If you are a recent graduate and you haven’t worked a lot, you might not have enough Class 1 National Insurance contributions to make you eligible to claim. In this case you will have to claim Universal Credit.

If you are interested in applying for the Kickstart Scheme you must be on Universal Credit and not JSA.

We have positions available on our website, so please do visit https://www.thegraduateproject.co.uk/jobs/search

By Anirudh Nair