Labours Welfare Reform Proposal.

Like you, I am baffled. How can somebody who has been unemployed have paid in many contributions Surely this is just going to widen the gap between rich and poor even further. I think the Labour Party must be getting desperate as they appear to be blurring the distinction between themselves and the Conservatives even more.
If anybody else has understood the proposals, I would be really grateful if they would explain them to me.

Isn't it just typical, throw out a soundbite but don't follow it up?

Perhaps it will be something like the NL (and possibly Germany?) where, if you lose your job through no fault of your own, if you have worked for long enough you get 70% of last salary for a set time and then go down to a very basic level. I think this is designed to help people at whatever level they have been paid and give an incentive to get back into work.

I have no idea how it would work with other parts of the welfare system.

I wondered, when I heard these proposals, just how well Labour ministers understand the whole system of tax, NI and benefits. The one I heard was woffling on about income tax contributions. At the moment, contributory JSA and ESA depend on NI contributions paid. When you sign on for benefits your NI contributions are paid for you as long as you continue to sign on.

I heard something about this and wasn't impressed. I don't know the details but, on the face of it, it sounds very unfair.

Aah, it sounds as if they are picking bits from the NL template.

Yes, unemployment is paid according to earnings.
And I think that is very fair.

What Labour is not saying at the moment is that contributions are/were also paid according to earnings.
Not one flat rate for all!

It used to be spliced out on your payment slip. Be it healthcare, old age pension, etc.

I remember, even in my working day 40 years ago, if you earned above a certain amount you still paid towards NHS, however you were not entitled to use it and had to take out your own medical insurance.
Fair?

johanna

What is the NL template please.?

This is the way unemployment is paid in most West European countries, rightly or wrongly. In Switzerland you get 80% of previous salary, but only for about 1 year, then it decreases and after a couple of years go to minimum survival rate. During that time, you also have to train or re-train if considered necessary, and you have to take jobs that come up ... even if not your dream job, within 'reason'. It is only payable to those who have contributed a minimum of 12 months in last 24. It just could not work in the UK at present, with so few jobs going - but the thinking behind it is that it seriously encourages people to take jobs, even if lower paid, etc.

There used to be an Earnings Related Supplement to Unemployment Benefit. This was introduced in 1966 and ended in 1982.

Pogs
Manner of speech. Talking about Holland.

Just for interest/comparison:

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Unemployment in Switzerland
Your contributions to the unemployment insurance sc
heme (
Arbeitslosenversicherung - assurance
chômage
) are directly deducted from your gross salary by y
our employer. To be eligible for
unemployment benefit you must meet the following co
nditions:
•
In the two years before becoming unemployed and re
gistering with the employment office you
must have held, for at least 12 months, a job requi
ring the payment of unemployment
insurance contributions
•
You must remain at the disposal of the employment
office and must at the same time actively
seek work on your own behalf
If you have left their previous employment without
an acceptable reason your entitlement to
unemployment benefits may be suspended for a certai
n period of time.
Unemployment benefits
If you become involuntarily unemployed, you are ent
itled to 70 per cent of the average earnings paid
into your unemployment insurance in the previous si
x months. If you have a child or your daily
allowance falls below a predetermined minimum, you
are entitled to 80 per cent of the average
earnings in the last six months.
Unemployment benefit is allocated as a daily allowa
nce covering five days per week. Entitlement
begins after a waiting period of five days of prove
n unemployment. Unemployment benefits allows up
to 400 daily allowances to be received in a two-yea
r period. If you’re over 55 and have made
unemployment insurance contributions for at least 1
8 months, you are permitted up to 520 daily
allowances in the same period.
In many cases, your employment office might allow y
ou to take training courses or be allowed to
benefit from other programmes while continuing to r
eceive daily allowances.

The ERS was paid with sickness and maternity benefit too

Johanna

I knew the car number plate NL was for the Netherlands but I thought I was being too simplistic. Easier than I thought.

Granjura Thanks.

In that case would Labour not be on the back foot with the country with a proposal like that. It sounds worse than ever, or am I not seeing the logic to it.

I think you're right, POGS. And surely it would mean even more being spent on the benefits budget?