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Earnings-Related Sickness And Unemployment Benefits

Volume 982: debated on Thursday 3 April 1980

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asked the Secretary of State for Social Services if he will make a statement detailing the relevant year in respect of national insurance contributions which would be applied to claims for earnings-related sickness and unemployment benefit made between January and December 1981 and after December 1981.

Earnings-related supplements are calculated on earnings in the tax year immediately preceding the calendar year in which the period of interruption of employment began. For claims for benefit made in respect of periods of interruption of employment commencing between 4 January 1981 and 2 January 1982 the relevant tax year will be 1979–80; for claims in respect of periods after 3 January 1982, the relevant tax year would be 1980–81. Under proposals now before Parliament, there will be no entitlement to earnings-related supplement in respect of periods of interruption of employment which begin after 3 January 1982. Notice of this withdrawal was given in my right hon. and learned Friend's Budget Statement before the start of the tax year, but of course this is subject to Parliament passing the necessary legislation.

asked the Secretary of State for Social Services if he will set out the notional amounts of the employee's national insurance contribution which fund the earnings-related supplements to sickness and unemployment benefits.

National insurance contributions are set taking account of all likely calls on the National Insurance Fund, and are not hypothecated to par-that a combined class 1 contribution rate ticular benefits. However, it is estimated (employer and employee) of about 0.3 per cent. of reckonable earnings—with the associated Treasury supplement—would meet the cost of paying earnings-related supplement to sickness and unemployment benefits in the current financial year.