Under the new arrangements for the assessment of earnings from employment for unemployment assistance purposes, which came into force in November 1996, an unemployed person who works up to three days a week, may, subject to the level of his or her earnings, qualify for the full rate of UA for that week, including payment in respect of the days in the week on which the person worked. The improved arrangements provide that earnings are assessed at 60 per cent. In addition, persons without children are allowed a £10 disregard for each day worked, while the balance of earnings are assessed at 60 per cent.
The previous arrangements, which have now been replaced, provided that payment was only made in respect of the days in the week on which the person was unemployed, less one-sixth of their weekly means for each day of unemployment. Claimants were allowed to earn up to £15 above the appropriate daily rate of UA before being assessed with means. However, no payment was made in respect of days of employment, irrespective of the level of daily earnings.
The introduction of the new arrangements has served two purposes. Firstly, it ensures that claimants have an incentive to work at all levels of earnings, even where the level of pay is less than the rate of UA. Secondly, the new arrangements make it easier for people to see clearly for themselves just how much better off they will be if they take up part-time or casual employment as opposed to claiming UA.