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Unemployment Benefits

Volume 507: debated on Monday 15 March 2010

To ask the Secretary of State for Work and Pensions what recent assessment she has made of the effect on benefit claimants of the period between which they move into work and have their benefit stopped and their first payment from their employer; what steps she is planning to take to help deal with this issue for benefit claimants; and whether she has considered allowing providers more flexibility to cover this gap using their service fee. (315695)

We keep the transition of claimants from benefits to employment under regular review and have put in place a number of schemes that give people extra financial support on returning to work. For example, we introduced the job grant to specifically help customers who move into work manage until they receive their wages. It provides eligible customers a non-taxable payment of £100 for single people and couples without children, and £250 for lone parents and couples with children. In addition, housing costs are paid for four weeks after returning to work to customers who have been on income support or jobseeker's allowance for 26 weeks or more. As benefits are generally paid two weeks in arrears, this goes some way to filling any gap before payment of first wages.

For all customers leaving jobseeker's allowance for work, Jobcentre Plus staff can help them make claims to working tax credit using a special fast track procedure, which means that in many cases tax credit is paid in advance of first wages. As a last resort, in cases of very urgent financial need, customers can apply for interest-free crisis loans from the social fund.

Flexible New Deal providers already have the flexibility to use their service fee to provide help and support tailored to the needs of each jobseeker's allowance customer, to enable them to move into and stay in work.