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When facing unemployment or reduced working hours, many individuals explore their options for financial support. A common question arises: can you claim Job Seekers Allowance if you have savings? The answer depends on the type of benefit you apply for.
With New Style Jobseeker’s Allowance, your savings do not impact your eligibility. However, other benefits, including Universal Credit or income-based JSA, are means-tested and do take savings into account.
This article offers a detailed guide to help you understand how savings interact with benefit claims and what you need to qualify.
What Is New Style Jobseeker’s Allowance and How Does It Work?
New Style Jobseeker’s Allowance (JSA) is a type of unemployment benefit for people who have worked and paid sufficient National Insurance contributions.
Unlike other types of JSA, this version is not means-tested, meaning it does not consider your savings or your partner’s income when calculating your entitlement.
This benefit:
- Is available for up to 182 days (approximately 6 months)
- Requires you to be actively looking for work
- Is usually paid every two weeks
- Includes National Insurance credits towards your State Pension
New Style JSA can be claimed on its own or alongside Universal Credit. However, if claimed together, the New Style JSA amount is counted as income and may reduce the Universal Credit you receive.
Does Having Savings Affect Job Seekers Allowance Claim?
The impact of savings on your Job Seekers Allowance claim depends on the type of JSA you are applying for.
If you are applying for New Style JSA, then savings, whether yours or your partner’s, do not affect your claim. This makes it particularly helpful for individuals with moderate or high savings.
However, if you apply for income-based JSA or Universal Credit, your savings are assessed. If your savings exceed £6,000, they can reduce your benefit entitlement. Once they exceed £16,000, you’re generally not eligible for means-tested benefits.
In summary:
- New Style JSA = Not affected by savings
- Income-based JSA / Universal Credit = Affected by savings thresholds
Understanding these rules can help you choose the right type of JSA to apply for and manage your savings wisely while claiming benefits.
What Are the Eligibility Criteria for New Style Jobseeker’s Allowance?
Before applying, it’s crucial to ensure you meet the eligibility criteria for New Style JSA. This benefit is contribution-based, meaning it relies on your National Insurance record rather than your income or savings.
You must meet the following core conditions:
| Eligibility Criteria | Details |
| Age | Must be 18 or over and below State Pension age |
| Residency | Must live in Great Britain |
| Employment status | Unemployed or working less than 16 hours per week |
| National Insurance contributions | Must have paid Class 1 contributions in the last 2-3 years |
| Work availability | Must be available and actively looking for work |
| Health status | Must be fit to work (not claiming due to illness) |
Meeting these conditions is essential to qualify for the benefit, especially since it doesn’t rely on financial means like savings or household income.
Do You Need to Have Paid National Insurance?
Yes, to claim New Style JSA, you must have a strong National Insurance history. Specifically, you should have worked as an employee and paid Class 1 National Insurance contributions for at least two of the past three tax years.
If you didn’t meet the contribution level but received National Insurance credits, these may count toward your eligibility.
People who have only paid Class 2 contributions (common for the self-employed) typically do not qualify unless they fall under specific exceptions like share fishermen or volunteer development workers.
Are There Work or Residency Conditions?
To claim New Style JSA, you must reside in Great Britain and be actively available for work. Additionally, you cannot be working 16 hours or more per week, and you must not be involved in a trade dispute with your employer.
You are also not eligible if a disability or illness prevents you from working. In such cases, you may be directed toward other benefits like Employment and Support Allowance(ESA).
These criteria ensure that only those actively seeking employment and available to work receive this support.
How Do Savings Impact Universal Credit and Income-Based Benefits?
When it comes to means-tested benefits like Universal Credit or income-based JSA, your savings are thoroughly reviewed.
These benefits are designed for those on a low income or with limited financial resources, so the Department for Work and Pensions (DWP) applies thresholds.
Here’s how savings affect these benefits:
- Up to £6,000: No impact on benefits
- £6,000 to £16,000: Benefit amount gradually reduced
- Over £16,000: Not eligible for Universal Credit or income-based JSA
Types of savings that count include:
- Cash in bank or building society accounts
- Stocks, shares, and investments
- Property (excluding your main residence)
Understanding these thresholds is vital if you’re considering applying for a means-tested benefit. If your savings exceed the limit, your application is likely to be rejected, regardless of your employment status.
What Counts and Doesn’t Count as Savings for Benefit Purposes?
Knowing what is classed as savings helps applicants understand how their finances might affect their benefits. For means-tested benefits, only specific types of capital are assessed.
| Counted as Savings | Not Counted as Savings |
| Cash in banks or building society accounts | Furniture, personal belongings |
| Stocks, shares, and bonds | Jewellery for personal use |
| Property (excluding your primary home) | Pension pots (if not accessed yet) |
| Premium Bonds or National Savings investments | Business assets (in some cases) |
Understanding these classifications can help you determine whether you are above or below the savings threshold for specific benefits.
Can You Claim Both New Style JSA and Universal Credit?
Yes, it is possible to claim both New Style JSA and Universal Credit at the same time, but they interact with each other. Your New Style JSA payments count as income for Universal Credit purposes. This means the amount you receive from Universal Credit may be reduced accordingly.
New Style JSA is paid more frequently (usually fortnightly) and also contributes different National Insurance credits, which count towards your State Pension.
Claiming both may be beneficial for people who have some income from work but still require additional support. However, it’s important to consider how they affect each other before applying for both.
How Does Working or Studying Affect Your JSA Entitlement?
Working or studying can impact your eligibility for New Style JSA depending on the nature of your activity.
If You Are Working
You are generally not eligible for New Style JSA if you work 16 hours or more per week. If you work fewer hours, your earnings may reduce the amount you receive. You must also report your work details to your work coach to avoid overpayment.
If You Are Studying
Part-time students may still qualify, provided they meet all other conditions. Full-time students may only be eligible if:
- They study for a qualification at Level 4 or below
- They do not receive maintenance loans, bursaries, or grants
- They can commit to work-related activities agreed with a work coach
It’s essential to promptly inform your adviser if your study or work situation changes.
What’s the Application Process for Claiming JSA With Savings?
If you have savings and are considering applying for Jobseeker’s Allowance, the process is fairly simple and follows a clear set of steps.
Steps to Apply:
- Check eligibility on the official portal
- Submit your application online
- Provide documentation, including:
- National Insurance number
- Employment history
- Identity verification
- Attend an interview with a work coach
- Receive updates on claim status via letter or online account
You should expect a decision within a few weeks. Once approved, payments are made every two weeks. Be sure to keep the Jobcentre informed of any changes in your work or study status.
Conclusion
In summary, claiming New Style Jobseeker’s Allowance is still possible even if you have savings, as it is not a means-tested benefit. Your financial resources, including your partner’s savings, will not affect your entitlement.
However, other benefits like Universal Credit may consider your savings and affect your eligibility or payment amount. Understanding the distinctions between benefit types ensures you apply for the right support based on your situation.
Always verify your eligibility before submitting your claim to ensure a smooth application process.
Frequently Asked Questions
Can self-employed individuals apply for New Style JSA?
Only in specific cases like share fishermen or volunteer development workers.
How does pension income affect your JSA payments?
Any pension income over £50 per week is deducted from your New Style JSA.
Do joint savings accounts with family members affect eligibility?
Yes, if the money is accessible and legally considered yours.
Can you switch from Universal Credit to New Style JSA?
Yes, if you meet the National Insurance contribution requirements.
Are students with savings eligible for New Style JSA?
Savings don’t affect eligibility, but full-time study conditions must be met.
What happens if your savings increase after you start receiving JSA?
For New Style JSA, increased savings won’t affect your payments.
Can I reapply for JSA after becoming ineligible due to high savings?
Yes, once your savings decrease or if you qualify under contribution-based criteria.
