Contribution conditions for ESA and JSA

Issue 219 (December 2010)

Judith Paterson describes the new, stricter national insurance contribution conditions for employment and support allowance (ESA) and jobseeker’s allowance (JSA) from November 2010.

New claimants of ESA and JSA from 1 November 2010 must work for a minimum number of weeks to meet the first national insurance contribution conditions.1 The change does not affect the second contribution condition.

Prior to November, a person could earn enough to reach the required total of 25 times the lower earnings limit in fewer than 25 weeks, because all earnings counted towards the total. Now only earnings up to the lower earnings limit in each week count, so claimants must have worked the full number of weeks, now increased from 25 to 26, in order to meet this condition. These 26 weeks need not be consecutive but must now fall within one of the two tax years (April to April), before the benefit year (January to December) in which the claim is made, or in which the limited capability for work or jobseeking period began. Bringing the relevant years down from three to two aligns ESA with JSA. The relaxation of this rule for carers and others by allow- ing any year to count remains the same.

The tables below illustrate the changes and summarise the new conditions.

  Old ESA conditions New ESA conditions
First contribution condition Paid Class 1 or 2 contributions No change
 

 

On earnings 25 times the lower earnings limit

 

On earnings of at least the lower earnings limit in 26 weeks, which need not be consecutive
  In one of the last three complete tax years before the relevant benefit year In one of the last two complete tax years before the relevant benefit year
Second contribution condition

Paid or credited Class 1 or 2 contributions on earnings 50 times the lower earnings limit in each of the last two complete tax years before the relevant benefit year 

No change

 

  Old JSA conditions New JSA conditions
First contribution condition Paid Class 1 contributions No change
  On earnings 25 times the lower earnings limit On earnings of at least the lower earnings limit in 26 weeks which need not be consecutive
Second contribution condition In one of the last two complete tax years before the relevant benefit year No change
  Paid or credited Class 1 contributions on earnings 50 times the lower earnings limit in each of the last two complete tax years before the relevant benefit year No change
  • 1. ss12 and 13 Welfare Reform Act 2009; The Social Security (Contribution Conditions for Jobseeker’s Allowance and Employment and Support Allowance) Regulations 2010 No.2446