HC Deb 16 March 1995 vol 256 cc695-6W
Mr. Frank Field

To ask the Secretary of State for Social Security what would be the cost and how many individuals would be successful in claims of(a) unemployment benefit, (b) sickness benefit and (c) invalidity benefit through qualification of sickness benefit if the pre-1988 contribution rules were re-established.

Mr. Hague

[holding answer 3 March 1995]: The estimated cost and caseload increases of restoring the pre-1988 contribution conditions are given in the tables:

Table 1: Effects of restoration of pre-1988 National Insurance contribution conditions on claims to and cost of unemployment benefit
Gross cost (£million) 115
Net cost (£million) 20
Increase in unemployment benefit recipients 45,000

Notes:

The following assumptions have been made:

  1. 1. Costs have been rounded to the nearest £5 million and caseloads to the nearest 5,000.
  2. 2. Calculations are based on an unemployment benefit caseload of 500,000.
  3. 3. Calculations have been based on data taken from the 1992-93 National Insurance Recording System data-base, the 1993 Annual Statistical Enquiry and the 1990/91/92 Family Expenditure Surveys, updated to 1994–95 prices and benefit levels.
  4. 696
  5. 4. Some people who would satisfy revised contribution conditions may be disallowed, or disqualified for, unemployment benefit on other grounds (eg leaving work voluntarily, misconduct, compensation from an employer).
  6. 5. The figures are an under-estimate as no allowance can be made for people who sign as unemployed for the first time as s result of the change in contribution conditions.

Table 2: Effects of restoration of pre-1988 National Insurance contribution conditions on claims to and cost of incapacity benefit
Long-run gross cost (£ million) 500
Long-run net cost (£ million) 100
Estimated number of successful new Short-term (lower rate) Incapacity Benefit claims (per annum) 50,000
Long run increase in number of longer term Incapacity Benefit recipients 100,000

Notes:

1. "Longer term incapacity benefit" means those receiving short-term (higher rate) and long-term incapacity benefit.

The following assumptions have been made:

  1. 1. Costs have been rounded to the nearest £50 million and caseloads to the nearest 50,000.
  2. 2. Calculations have been based on data taken from the 1992–93 National Insurance Recording System data-base, and the 1993 Annual Statistical Enquiry, updated to 1994–95 prices and benefit levels.
  3. 3. New entitlements come from either the current severe disablement allowance caseload or from those, registering as sick, who are less than 80 per cent. disabled and who currently have insufficient contributions.
  4. 4. Allowance has been made of the effect of the incapacity benefit changes and the expected effect of the new medical test on the long-term Incapacity Benefit caseload.
  5. 5. The new contribution conditions for the lower rate of short-term incapacity benefit are assumed to apply to long-term incapacity benefit. This means that all those who get lower rate of short-term incapacity benefit will move onto long-term incapacity benefit as long as their incapacity continues.
  6. 6. The figures are an under-estimate as no allowance can be made for people registering as sick for the first time as a result of the change in the contribution conditions.
  7. 7. These estimates are highly uncertain and should be treated with extreme caution.

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