Can I Claim Job Seeker Allowances If I Am Furloughed?

Did you know that recent reports claim that as of February this year, about 11.2 million jobs, from 1.3 million different employers had been furloughed in the UK? This was done as part of the government’s job retention scheme introduced as a response to the extensive economic damage that was brought about by the COVID-19 pandemic. But as every cloud has a silver lining, there’s one attached to these stark statistics. You may be capable of claiming certain benefits while on furlough.

Claiming Benefits While On Furlough

If both you and your employer agree, your employer might be able to keep you on the payroll even if they are unable to operate, or have no or less work for you to do, due to the ongoing pandemic. This is known as being put ‘on furlough’.

If you are on furlough, you can be paid by the employer, who will be paying taxes and NI from the income earned by you and employer’s contribution.

As ongoing CJRS scheme, your employer may be able to pay up to at least 80%* of regular wages for unworked hours via the Coronavirus Job Retention Schemefunding received by HMRC. This will be maximum up to £2,500 monthly. An employer may also choose to top-up pay more from their business accounts.

In a few circumstances, employers may also bring a furloughed employee back to work for any shift pattern or any amount of time, this is known as flexible-furlough.

*Note: from May 1st onwards, employers can also claim CJRS Furlough for a new employee who has been hired between 1 Nov 2020 to 2nd March 2021, provided they have submitted their RTI between 20 Feb 2021 to 2nd March 2021 and employees are continuing on PAYE payroll. From July 1st onwards, CJRS funding of 80% will reduce and employers will start contributing 10% and 20% from 1stAug till 30thSep 2021, so that employee should at least get 80% of wages for unworked hours.

If your income reduces when you are on furlough, you may also be eligible for the Universal Credit. If you are considered eligible for Universal Credit, earnings you receive when put on furlough will be considered like any other kind of earning. There is a possibility that it will affect the amount of Universal Credit you may be receiving.

Please be aware that if you are receiving tax credits or benefits replaced by the Universal Credit, these are going to be stopped when you submit an application for Universal Credit. They cannot be restarted.

If you submit an application for Universal Credit, it will have no effect on the employer.

If you had been appointed to work below 16 hours a week before being placed on furlough, there are chances that you will be eligible for the New Style Jobseeker’s Allowance (JSA). Let’s take a look at the latter in detail.

New Style Jobseeker’s Allowance (JSA): An Overview

If you are unemployed or if you work less than, on average, 16 hours every week, you may seek and benefit from the New Style Jobseeker’s Allowance (JSA).

The New Style JSA is basically paid out every fortnight. You can claim it at the same time as you claim the Universal Credit.

New Style JSA is widely considered to be essentially contribution-based. This indicates that you are likely to receive it if you have paid and/or have been credited with sufficient National Insurance (NI) contribution in two full tax years before claiming.

If you are eligible for both the New Style JSA and the Universal Credit, if you receive any New Style JSA, it will be considered to be your income for the Universal Credit.

What Must I Do To Be Eligible For The ‘New Style’ JSA?

A suitable candidate for the new-style JSA is required to:

a) Have worked as an employee
b) Be paid Class 1 National Insurance contributions within the past two to three years. National Insurance credits may be taken into consideration.

You will be ineligible if you have been self-employed and have only been receiving Class-2 National Insurance contributions unless you had been working as a volunteer development worker or share fisherman. You will also need to meet the following criteria:

• Your age should be 18 years old or more. However, you need to (there are a few exceptions if you are 16-17 years old)
• You are categorized in the State Pension age
• You cannot be enrolled in full-time education
• You will need to be available for employment
• You cannot be working at that time, or be employed for less than 16 hours per week
• You cannot be diagnosed with a disability or an illness that restricts you to work
• You need to be living in Scotland, Wales or England
• You possess the right to employment in the UK
• You will need to take measures to look for a work
• You must continue following guidance on working safely during the pandemic
• Your partner’s savings and income will not influence your claim
• You can benefit from the ‘new style’ JSA for about six months or up to 182 days. Consider discussing with your work coach the next best step and after this period

How Much JSA Can I Avail?

If you are eligible for the new style JSA, you can benefit from a ‘personal allowance’ every week. For instance, it will be:

• If you are between the age group 18 to 24 years, you will get £58.90
• If you are 25 years or above, you will receive £74.35

The amount will vary, depending on individual situations. For instance, your payment may be less if you have been working part-time or are receiving a pension.

How To Claim The JSA?

To submit your application, you will need the following:

• Your National Insurance number building society or bank account details. If you cannot provide yours, share those of a family member’s or reliable friend’s
• Your employment details over the last six months, including the contact details of the employer and dates or the period you have worked with them
• Your private pension statement letter

If you still have concerns or if you want to know further, you can leave us a comment or get in touch with us over our email ([email protected]).