On March 26th, Jon Stone, a policy correspondent at The Independent UK wrote a series of tweets in which he claimed that select normal EU unemployment benefits are similar to what the UK is doing for those who cannot work due to the COVID-19 crisis. “One thing I think many British people may not understand is that the ‘government will cover 80% of your salary if you can’t work because of the coronavirus’ scheme is actually very similar to how regular unemployment benefit works in a lot of Europe”.
Stone went on to claim: “These are funded by contributions, and usually after you exhaust this initial unemployment benefit you fall back to a lower tier that is more akin to Britain’s JSA system. But there’s basically a whole tier missing from the UK welfare state.” Jon Stones statements about the UK unemployment system in the Covid-19 crisis prove to be true.
Unemployment in the UK
Jon Stone’hes first tweet, in which he states that the UK government will cover 80% of one’s salary if they are not able to work because of the coronavirus can easily be checked on the UK government website. It states that an employer can claim for their employee’s wages through the Coronavirus Job Retention Scheme. This is to claim to cover wages for employees on temporary leave due to COVID-19. It is stated on the government site that any entity with a UK payroll can apply, including businesses, charities, recruitment agencies and public authorities.
If the maintenance of a workplace is affected by COVID-19 then employers are able to put their employees on furlough, a temporary leave, and apply for the grant offered by the government, which covers 80% of their usual monthly wage costs, up to £2,500 a month. This temporary scheme was initially put in place beginning March 1, 2020 and will continue until the end of October.
Technically, furlough is not considered unemployment, as it is a temporary position. The UK government website shows that Jon Stone’s tweet is mostly true. However, there is a limited amount of £2,500 per month.
Unemployment in Europe
The European Commission website gives information on the unemployment policies in other European countries, which Stone mentions in his series of tweets.
According to the European Commission website, under the Employment, Social Affairs and Inclusion section, an unemployed person in the Netherlands can be entitled to unemployment benefit under the Unemployment Insurance Act. This comes with a number of conditions; insurance against unemployment, having lost at least 5 work hours a week, being available to work on the Dutch labour market, working to find another job, becoming unemployed through no fault of own, and having worked at least 26 weeks in the 36 weeks before you became unemployed.
One who meets these conditions in the Netherlands is entitled to 75% of their last pay per day (up to a maximum of €214.28 during the first two months and 70% of the last pay earned thereafter).
In Germany, one can apply for unemployment benefits if they have no job, work less than 15 hours per week, are available for work, and are actively seeking to end their unemployment. They must also have been paying contributions for at twelve months of the two years before becoming unemployed, as the contribution rate for unemployed insurance in 2.5% of one’s earned income. To receive unemployment benefits in Germany, one must inform the labour office of their unemployment and apply for the benefit.
An unemployed person with children will receive 67% of the net wage they received on average per day during the 12 months before becoming unemployed, whereas someone without children will receive 60%. Although this is less than the 80% of usual monthly wage the UK is covering due to unemployment as a result of the global pandemic, these German benefits are still better than the benefits the UK provides on a normal basis.
Based on information provided by the European Commission, France offers a “back-to-work allowance” (allocation d’aide au retour a l’emploi, ARE) paid by unemployment insurance to employees. Similar to the Netherlands and Germany, there are a conditions that one must meet to qualify for these benefits; show proof of termination, be capable of working, be enrolled as a job seeker, have worked at least 88 days, or 610 hours over the past 28 months, or 36 months for those over the age 53 years old, have no reached the legal retirement age, and are willing to accept reasonable job offers.
Someone who meets these conditions in France is entitled to nothing less than 57% and not higher than 75% of the daily reference wage. The duration of payment of the allowance to the job seeker depends on the factor of age, as one who is under 53 years old will receive the benefits for 28 months preceding the end of their contract, and one over the age of 53 will receive allowance for 36 months.
The UK Jobseeker’s Allowance (JSA) system works in three different types; ‘new style’ JSA, contribution-based JSA, and income-based JSA. Which type one can get depends on their circumstances. All of these types of JSA come with the conditions that one is available to work, not be in full-time education, and not be working or be working on average less than 16 hours per week.
According to the UK government website, under the Jobseeker’s Allowance (JSA) section, the maximum amounts unemployed people can get is listed, but how much an individual is entitled to depends on factors such as age, income and savings.
People from 18-24 years old can receive up to £58.90 per week. Those who are 25 years old or older are eligible for a maximum of £74.35 per week and couples (both over the age of 18) can receive up to £116.80 per week. Payments are usually made every two weeks.
Jon Stone’s claim that there is a tier missing from the UK welfare state is true, as the UK does not offer similar unemployment benefits in normal circumstances, aside from what they are offering for furloughed employees during the COVID-19 crisis. Their regular unemployment benefits provide far less than the Netherlands, Germany and France, failing to provide unemployment benefits related to previous salaries.
RESEARCH | ARTICLE : Serena Halani
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