New Style JSA vs Universal Credit

If you have lost your job, the two benefits you are most likely to be weighing up are New Style Jobseeker's Allowance and Universal Credit. They are different in almost every respect. New Style JSA is contribution-based: it depends on your National Insurance record, is paid fortnightly, and is not means-tested. Universal Credit is means-tested: it depends on your household income, savings and circumstances, and is designed to replace benefits such as income-based JSA and ESA, Income Support, Housing Benefit, and Child and Working Tax Credits¹.

The single most important thing to understand is that you can claim both at once, but you do not get both in full. New Style JSA counts in full as income when your Universal Credit is worked out, so your Universal Credit is reduced by the same amount as your JSA award³. In practice the JSA is deducted pound for pound from the Universal Credit you would otherwise receive⁵.

That does not make claiming both pointless. New Style JSA is money you have already contributed towards through National Insurance, and it is paid whether or not you have savings or a working partner. Universal Credit can add housing costs, child elements and other top-ups that JSA does not cover. The two are administered separately, so you deal with the Jobcentre for JSA and with the Universal Credit service for UC.

New Style JSA and Universal Credit: two different benefits

New Style JSA and Universal Credit sit in different parts of the benefits system, and that difference drives everything else about how they work.

New Style JSA is a contribution-based benefit. It is a fortnightly payment that can be claimed on its own or at the same time as Universal Credit⁷. While you receive it, you are awarded Class 1 National Insurance credits, which can help towards your State Pension¹. It is not means-tested, so savings and a partner's earnings do not normally stop you getting it, though they can affect Universal Credit.

Universal Credit is a means-tested benefit. It is designed to replace benefits such as income-based JSA and ESA, Income Support, Housing Benefit, and Child and Working Tax Credits². Income-based JSA has ended for new applicants and been replaced by Universal Credit, and the JSA scheme is now only open to contributory-based claims called New Style JSA⁶. Universal Credit has been replacing income-based JSA since April 2013⁸.

The practical consequence is that the two benefits answer different questions. New Style JSA asks whether you have paid enough National Insurance. Universal Credit asks what your household needs to live on, taking income and savings into account. That is why someone with a full National Insurance record and a working partner might get New Style JSA but little or no Universal Credit, while someone with a patchy record and no other income might get Universal Credit but no JSA.

You can claim New Style JSA, Universal Credit or both

There are three routes open to you, and the right one depends on your National Insurance record, your household income and your savings.

New Style JSA on its own. You can claim it without Universal Credit. You can apply online on GOV.UK or by phone to Jobcentre Plus; if you cannot apply online or on the phone, call or visit your local Jobcentre to ask about other ways to claim¹⁰. Before you are paid, you will need to accept an agreement called a claimant commitment¹¹. If you are under 18, are an appointee applying on behalf of someone, or need help to claim New Style JSA, you must apply by phone¹¹.

Universal Credit on its own. In most cases, if you want to make a new claim for income-based support, you will need to claim Universal Credit instead¹². You might be able to get it at the same time as New Style JSA or New Style ESA¹³.

Both together. You can claim JSA and Universal Credit at the same time, with JSA payments taken out of your Universal Credit allowance¹⁴. If you qualify for both, the value of your JSA will be deducted from your Universal Credit⁶.

New Style JSA counts in full as income for Universal Credit

This is the rule that surprises most people, and it is worth stating plainly: New Style JSA and New Style ESA count in full as income when calculating your Universal Credit, which means your Universal Credit will be reduced by the value of the award³.

The same rule applies across the sources. If you qualify for both new style JSA and Universal Credit, your new style JSA payments count as income when claiming Universal Credit and lower your Universal Credit payment by the same amount⁴. Your New Style JSA payments will count as income and reduce the amount of UC you'll receive⁵. If you get both benefits, your New Style JSA payments will reduce the amount of Universal Credit you receive¹⁶.

New Style JSA also counts as income when working out entitlement to other benefits, unless you are getting your benefit topped up by Pension Credit or Universal Credit, in which case your New Style JSA is ignored for Housing Benefit purposes⁷.

Is New Style ESA treated the same way as New Style JSA?

Yes. New Style ESA follows the same pattern as New Style JSA when it comes to Universal Credit, and the same deduction applies.

You may be able to claim Universal Credit and New Style ESA at the same time¹⁷. You can claim new style ESA and Universal Credit at the same time, but if you do, your Universal Credit amount will be reduced by the amount of ESA received¹⁸. The amount you get from New Style ESA will be deducted from your Universal Credit amount¹⁹. If you get both benefits, your Universal Credit payment will be reduced by the amount you get for New Style ESA²⁰. Any New Style ESA payments will reduce your Universal Credit payments²². The New Style ESA you are paid will reduce your Universal Credit payment by the same amount²³.

There is one important difference between the two benefits. You cannot get New Style ESA if you get Jobseeker's Allowance or Statutory Sick Pay²⁰. So if you are claiming New Style JSA, you cannot also claim New Style ESA at the same time.

There is also a credits-only route. Even if you do not have enough National Insurance contributions to claim New Style ESA, you can apply for New Style ESA and have a Work Capability Assessment; you will get National Insurance credits but not any New Style ESA payments²⁴. If you apply for 'credits only' for New Style ESA, the DWP will check how your condition affects your work, but you will not get any money²⁰. You cannot get credits this way if you get Universal Credit at the same time²⁴.

Overpayments and what can go wrong

Overpayments are the main thing that can go wrong when you are claiming both benefits, and the rules are stricter than many people expect.

An overpayment under the Universal Credit system will be an overpayment of Universal Credit, New Style Jobseeker's Allowance or New Style Employment and Support Allowance²⁶. Overpayments arising from official error are recoverable for Universal Credit, new style Jobseekers Allowance, new style Employment and Support Allowance and Welfare Supplementary Payments⁹. All overpayments of Universal Credit and 'new style' benefits are now recoverable⁹.

That last point matters because it reverses what many people assume. Historically, some overpayments caused by official error were not recovered. That is no longer the case for Universal Credit and New Style benefits.

If you were paid too much JSA or ESA and had already claimed Universal Credit, you can ask for the amount you have to pay back to be reduced because you would have been able to get Universal Credit²⁸. This is a specific route worth knowing about if you are facing a repayment demand.

Where to get help with a claim

You do not have to work this out alone, and there is free, impartial help available.

For New Style JSA, you can usually apply online on GOV.UK, or by phone to Jobcentre Plus. If you cannot apply online or on the phone, call or visit your local Jobcentre to ask about other ways to claim¹⁰. The first step in making a claim for new-style JSA is to fill in the Jobseeker's Allowance online claim form, then attend an interview with JobCentre Plus²⁹. If you are under 18, are an appointee applying on behalf of someone, or need help to claim New Style JSA, you must apply by phone¹¹.

Once you are claiming, you must report changes in circumstances which might affect your entitlement to this benefit, by calling the New Style JSA helpline or writing to the Jobcentre Plus that pays the benefit³⁰.

If you are struggling financially while waiting for a payment, hardship payments may be available. Contact the Universal Credit helpline to apply if you are on Universal Credit, or contact Jobcentre Plus if you are on JSA or ESA on 0800 169 0190³¹.

For free, impartial advice on which benefits you qualify for, you can use a benefits calculator or speak to an adviser at a charity such as Turn2us, Citizens Advice or Scope. These services can help you work out whether claiming both benefits leaves you better off, and can help if you need to challenge a decision.