HC Deb 11 November 1998 vol 319 cc231-2W
Mr. Jack

To ask the Secretary of State for Social Security (1) if receipt of a compensation payment made on a monthly basis to a person not receiving an occupational pension prevents that individual from being granted jobseeker's allowance when all other application criteria are met; [58531]

(2) if those in receipt of (a) a redundancy compensation payment and a continuing annual payment and (b) a continuing annual payment only, are eligible for job seekers allowance; [58532]

(3) if those in receipt of a redundancy compensation payment and a continuing annual payment are eligible for unemployment benefit; [58533]

(4) if his Department classifies continuing annual payments as (a) a redundancy payment and (b) an occupational pension. [58534]

Angela Eagle

Jobseeker's Allowance replaced Unemployment Benefit and Income Support for the unemployed in October 1996 as the main benefit for this group. Jobseeker's Allowance has two elements: a contribution-based allowance for those who have paid sufficient National Insurance contributions and an income-based allowance for those who either do not qualify for, or whose needs are not met by, the contributory element.

Prior to October 1996, for people aged over 55, Unemployment Benefit was reduced by 10p for each lop of occupational pension received in excess of £35 a week. Other periodic payments from ex-employers made on account of the termination of employment by way of redundancy were treated as income other than earnings and did not affect entitlement to Unemployment Benefit. Lump sum redundancy payments up to the statutory limit did not affect the amount of Unemployment Benefit payable. Any sum paid in excess of this limit removed entitlement to benefit for a period, the length of which depended upon the sum involved.

Contribution-based Jobseeker's Allowance is reduced, for all people receiving occupational pension payments, on a penny for penny basis for any excess over £50 a week. Income-based Jobseeker's Allowance is reduced by an amount equal to the total pension payment received. Other periodic payments from ex-employers made on account of the termination of employment by way of redundancy do not affect entitlement to contribution-based Jobseeker's Allowance. Income-based Jobseeker's Allowance is, however, reduced by an amount equal to the total payment received.

Lump sum redundancy payments up to the statutory limit do not affect the amount of contribution-based Jobseeker's Allowance payable as they are treated as capital. Income-based Jobseeker's Allowance is not affected by capital under £3,000 but entitlement is reduced by £1 for each £250, or part of £250, over that amount up to a limit of £8,000. Benefit is not payable if a person's capital is over that limit. Any sum paid in excess of the statutory limit will remove entitlement to both elements of Jobseeker's Allowance for a period, the length of which depends upon the sum involved.