Unemployment benefit
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Unemployment benefits are payments made by governments to unemployed people. It may be based on a compulsory para-governmental insurance system. Depending on the jurisdiction and the status of the person, those sums may be meager, covering only basic needs (thus a form of basic welfare), or may compensate the lost pay somewhat proportionally to the previous earned salary. They often are part of a larger social security scheme. Unemployment benefits are generally given only to those registering as unemployed, and often on conditions ensuring that they seek work and do not currently have a job.
AustraliaIn Australia, social security benefits, including unemployment benefits, are funded through the income tax system. There is no compulsory national unemployment insurance fund, rather, benefits are provided for in the annual Federal Budget by the National Treasury and are administrated and distributed throughout the nation by Centrelink. Benefit rates are indexed to the Consumer Price Index and are adjusted twice a year according to the amount of underlying inflation or deflation. There are two types of payment available to those experiencing unemployment. The first, called Youth Allowance, is paid to young people aged 16-20 (or 15, if deemed independent by Centrelink). Youth Allowance is also paid to full-time students aged 16-24, and to full-time Australian Apprenticeship workers aged 16-24. People aged below 18 who have not completed their High School education, are usually required to be in full-time education, undertaking an apprenticeship or doing training to be eligible for Youth Allowance. For single under 18 year olds living at home the basic rate is AUD$91.60 per week. For over 18 to 20 years olds living at home this increases to AUD$110.15 per week. For those aged 18-20 not living at home the rate is AUD$167.35 per week. There are special rates for those with partners and/or children. The second kind of payment is called Newstart Allowance and is paid to unemployed people over the age of 21 and under the pension eligibility age. To get Newstart you must be unemployed, be prepared to enter into an Activity Agreement (by which you agree to undertake certain activities to increase your opportunities for employment), are an Australian Resident and satisfy the income test (which limits weekly income to AUD$32 per week before benefits begin to reduce, until your income reaches AUD$397.42 per week at which point no unemployment benefits are paid) and the assets test (you can have assets of up to AUD$161,500 if you own a home before the allowance begins to reduce and $278,500 if you do not own a home). The rate of Newstart allowance for single people is AUD$210.45 per week, paid fortnightly. Different rates apply to people with partners and/or children. The system in Australia is designed to support citizens no matter how long they have been unemployed for. This has been criticized by some conservative commentators, who allege that welfare generates a 'culture of welfare dependence'. In recent years the former Coalition government under John Howard has increased the requirements of the Activity Agreement, providing for controversial schemes such as Work for the Dole, which requires that people on benefits for 6 months or longer work voluntarily for a community organization to increase their skills and job prospects. There are other options available as alternatives to the Work for the Dole scheme, such as undertaking part-time work or study and training, the basic premise of the Activity Agreement being to keep the welfare recipient active and involved in seeking full-time work. For people renting their accommodation, unemployment benefits are supplemented by Rent Assistance, which, for single people, begins to be paid when the weekly rent is more than AUD$45.90. Rent Assistance is paid as a proportion of total rent paid. The maximum amount of rent assistance payable is AUD$51.60 per week, and is paid when the total weekly rent exceeds AUD$114.70 per week. Different rates apply to people with partners and/or children, or who are sharing accommodation. External links CanadaIn Canada the system is now known as Employment Insurance, but until 1996 it was called Unemployment Insurance. Canadian workers pay into a central fund that contributors can draw on if later unable to work. Since 1990, there is no government contribution to this fund. The amount a person receives and how long they can stay on EI varies with their previous salary, how long they were working, and the unemployment rate in their area. The EI system is managed by Service Canada, a service delivery network reporting to the Minister of Human Resources and Social Development Canada. A bit over half of EI benefits are paid in Ontario and the Western provinces but EI is especially important in the Atlantic provinces, which have higher rates of unemployment. Many Atlantic workers are also employed in seasonal work such as fishing, forestry or tourism and go on EI over the winter when there is no work. There are special rules for fishermen making it easier for them to collect EI. EI does not only cover unemployment, it also pays for maternity and parental leave, compassionate care leave, and illness coverage. The program also pays for retraining programs (EI Part II) through labour market agreements with the Canadian provinces. An unemployment insurance program was first attempted in 1935 during the Great Depression by the government of R.B. Bennett. It was, however, ruled unconstitutional by the Supreme Court of Canada as unemployment was considered a provincial responsibility. After a constitutional amendment was agreed to by the provinces, a reference to "Unemployment Insurance" was added to the matters falling under federal authority under the British North America Act, and the first Canadian system was adopted in 1940. Because of these problems Canada was the last major Western country to bring in an employment insurance system. It was extended dramatically by Pierre Trudeau in 1971 making it much easier to get. After this act more than 80% of unemployed Canadians received benefits. The system was sometimes called the 10/42, because one had to work for 10 weeks to get benefits for the other 42 weeks of the year. It was also in 1971 that the UI program was first opened up to maternity and sickness benefits, for 15 weeks in each case. The generosity of the Canadian UI program was progressively toned during the 10 years or so that followed the 1971 UI Act, and the federal government continuously reduced its financial contribution, eliminating it entirely by 1990. The EI system was again cut by the Progressive Conservatives in 1990 and 1993, then by the Liberals in 1994 and 1996. Amendments made it harder to qualify by increasing the time needed to be worked - although those seasonal claimants who work long hours over short periods turned out to gain from the replacement, in 1996, of weeks by hours to qualify. Today, the ratio of beneficiaries to unemployed stands around 40%, due to many unemployed persons not being covered at all (e.g. the self-employed), having exhausted the benefits they were entitled to, or not having worked long enough to qualify. However, it is noted that 80% of insured job-losers do initially receive EI benefits in Canada. The length of time one could take EI has also been cut repeatedly. The 1994 and 1996 changes contributed to a sharp fall in Liberal support in the Atlantic provinces in the 1997 election. In 2001, the federal government increased parental leave from 10 to 35 weeks and allowed workers to take EI for compassionate care leave while caring for a dying relative. Total EI spending is projected at $16.4 billion for 2007 (figures in Canadian dollars). A significant part of the federal fiscal surplus of the Chrétien and Martin years came from the EI system. Premiums were reduced much less than falling expenditures - producing, from 1994 onwards, EI surpluses of several billion dollars per year, which were added to general government revenue. The cumulative EI surplus stood at $54.4 billion at March 31, 2007, about three times as high as necessary. This drew criticism from Opposition parties and from business and labour groups, and has remained a central issue of the Bloc Québécois. The Conservative Party, after espousing such criticism while in opposition, chose not to take any action after being elected in 2006. On May 24, 2007, the Supreme Court of Canada agreed to examine a court challenge launched against the federal government by two Quebec unions, who argue that EI funds have been misappropriated by the government. External links
IrelandPeople aged 18 and over and who are unemployed in Ireland can apply for either the Jobseeker's Allowance (Liúntas do Lucht Cuardaigh Fostaíochta) or the Jobseeker's Benefit (Sochar do Lucht Cuardaigh Fostaíochta). Both are paid by the Department of Social and Family Affairs. The standard payment is €197.80 (maximum rate 2008) per week. Payments can be increased if the unemployed has dependants. For each adult dependent, another €131.30 (maximum rate 2008) is added; and for each child dependent, another €24.00 (maximum rate 2008) is added. There are more benefits available to unemployed people, usually on a special or specific basis. Benefits include the Rent Supplement, the Mortgage Interest Supplement, Fuel Allowance and the Smokeless Fuel Allowance, among others. Health care and education (at all levels) are free to all, not just the unemployed, already. More information on each benefit can be found here: ItalyUnemployment benefits in Italy consists mainly in cash transfers based on contributions (indennità di disoccupazione), up to the 40% of the previous wages for up to seven months. Other measures are:
In the Italian unemployment insurance system all the measures are income-related, and they have an average decommodification level. The basis for entitlement is always employment, with more specific conditions for each case, and the provider is quite always the state. An interesting feature worthy to be discussed is that the Italian system takes in consideration also the economic situation of the employers, and aims as well at relieving them from the costs of crisis. New ZealandIn New Zealand, these benefits provide income support for people who are looking for work or training for work through Work and Income, a service of the Ministry of Social Development To qualify people need to be aged 18 or over, or aged 16-17 and living with a partner and children you support and:
People who apply for the benefit may be asked to develop a Job Seeker Agreement with Work and Income where he/she agrees to look for work or prepare for work If applicant has a partner they may be included in the benefit and may also be asked to develop a Job Seeker Agreement with Work and Income. They may also need to:
In New Zealand the benefit is $148.73 weekly after tax for single person who is 20-24 years and Married, de-facto or civil union couple with or without children each. Single 25 years or over gets $178.49 per week after tax. The benefit payment can reduce due to any income the person or their partner earns. External links SwedenIn Sweden unemployment benefits are divided into a voluntary scheme with income related compensation up to a certain level and a comprehensive scheme that provides a lower level of basic support. The voluntary scheme requires a minimum of 12 months membership and a certain degree of employment during that time before any claims can be made. Employers pay a fee on top of the pre-tax income of their employees, which together with membership fees, fund the scheme (see Unemployment funds in Sweden). The maximum unemployment benefit is (as of July 2007) SEK 680 per day (SEK 14,960 per month). During the first 200 days the unemployed will receive 80 % of his or her normal income during the last 12 months. From day 201-300 this goes down to 70 % and from day 301-450 the insurance covers 65 % of the normal income (only available for parents to children under the age of 18). In Sweden tax is paid on unemployment benefits, so the unemployed will get a maximum of about SEK 10,000 per month during the first 100 days (depending on the municipality tax rate). In other currencies this means a maximum of approximately £730, $1,500, or €1,100, each month after tax. Private insurance is also available, mainly through professional organizations, to provide income related compensation that otherwise exceeds the ceiling of the scheme. The comprehensive scheme is funded by tax. Saudi ArabiaSaudi Arabia is an economic welfare state with free medical care[1] and unemployment benefits[2]. However, the country relies not on taxation but mainly oil revenues to maintain the social and economic services to its populace. External links United KingdomMain article: Jobseeker's Allowance Jobseeker's Allowance (JSA), or The Dole, the primary form of unemployment benefit in the United Kingdom, exists in two forms: income-based and contributions-based. If a claimant has paid enough National Insurance contributions of the correct class in the two complete tax years previous to the claim year in which the claim is being made, and can prove that they are available for work and are actively seeking employment, then they are entitled to contribution-based benefit. If not, and they have a low or no income they receive income-based benefit, but they still have to prove that they are available for and actively seeking work. Benefit levels are lower for those under 25 years old. To keep receiving benefit, a claimant has to visit the Job Centre every two weeks, give details of how they have been looking for work (a "job seeker's diary" is provided), and sign a declaration that they are following their Job Seeker's Agreement (hence the expression signing on). Jobseeker's Allowance RatesJSA for a single person is changed annually, and at 9 April 2007 the maximum payable was £59.15 per week for a person aged over 25, £46.85 per week for a person aged 18-24 and £36.65 per week for a person aged between 16 and 17. The rules for couples where both are unemployed are more complex, but a maximum of £92.80 per week is payable, dependent on age and other factors. Income-based JSA is reduced for people with savings of over £6,000, by a reduction of £1 per week per £250 of savings, up to £16,000. People with savings of over £16,000 are not able to get IB-JSA at all.[3] Note that the British system provides rent payments as part of a separate scheme called Housing Benefit. History
Unemployment benefits were first instituted in 1911. Over 2 million people were relying on the payments by 1921, as Britain was experiencing economic hardship after World War I. Those who disliked the handouts referred to the insurance as "the 'dole'"; this may come from the fact that the benefit was paid weekly, in cash, by the Employment Exchange clerk after the customer had 'signed on'. United StatesUnemployment Compensation is an amount received by an unemployed worker, originating from the United States or a State. In the United States, this compensation is classified as a type of social welfare benefit. According to the Internal Revenue Code, these types of benefits are to be included in a taxpayer’s gross income. Federal-State joint programsWisconsin originated the idea of Unimployment insurance in the US in 1932[4]. In the United States, there are 50 state programs of Unemployment Insurance plus one each in the District of Columbia and in Puerto Rico. Through the Social Security Act of 1935, the Federal Government of the United States effectively coerced the individual states into adopting plans of Unemployment Insurance. Unemployment Insurance (UI) is a federal-state program jointly financed through federal and state employer payroll taxes (federal/state UI tax)[5]. Generally, employers must pay both state and federal unemployment taxes if:
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