Changes were announced in the Commons by Liz Kendall

Two benefits from the Department for Work and Pensions (DWP) are set to merge.

Jobseeker’s Allowance (JSA) and Employment Support Allowance (ESA) will merge into a new Unemployment Insurance benefit under a major overhaul of the welfare system.

The proposal was announced by Work and Pensions Secretary Liz Kendall on Tuesday, March 18.

Unemployment Insurance would be time-limited but the Government has not said how long it will be awarded for.

Once the time-limited period ends, claimants who are still unemployed would need to apply for Universal Credit, subject to their personal circumstances.

Unemployment Insurance would be paid at the highest level you can currently receive for ESA, which is £138.20 a week.

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Claimants would be expected to actively seek work, Mirror reports.

But according to a Government Green Paper, there would be ‘easements’ for those with work-limiting health conditions.

People with long term health conditions would be able to claim other relevant benefits.

They would need to have made National Insurance contributions previously in order to receive the new Unemployment Insurance.

You currently need two to three years’ worth of National Insurance credits to claim for JSA or ESA.

Ms Kendall said: “So if you have paid into the system, you’ll get stronger income protection while we help you get back on track.”

JSA is awarded to people who are not working or who work on average less than 16 hours a week.

It can be claimed for up to six months and does not have a health-related requirement.

People claiming JSA are expected to be actively searching for work.

ESA is awarded to people who have a disability or health condition which affects how much they can work.

Under current rules, you have to under go a Work Capability Assessment (WCA) to determine if you should be placed into a work-related activity group or a support group.

But on Tuesday it was confirmed that the WCA for Universal Credit will be axed in 2028.

This assessment helps place benefit claimants into one of two groups – Limited Capability for Work (LCW) or Limited Capability for Work and Work-Related Activity (LCWRA).

If you are in the LCW group, you may be may be required to prepare to return to work in the future.

Those in the LCWRA group are considered to have a health condition that is so severe that they cannot return to work anytime soon.

There will be a new ‘health element’ added to Universal Credit for those who receive PIP – but this would only be available to those 22 or older.

Ms Kendall also announced plans to bring in a ‘permanent, above-inflation rise’ to the standard allowance of Universal Credit.

The Government said this will equate to an annual increase of £775 in cash terms by 2029/30.

Major changes have also been announced for PIP payments, which will make it harder for some people who need less help with daily activities to claim the benefit.

People will need to score a minimum of four points in one category to qualify for the daily living element of PIP.

This will not impact the mobility element of PIP.

The Government also announced plans for a comprehensive review of the PIP assessment process.

Ms Kendall told the Commons: “Going through the WCA is complex, time-consuming and often stressful for claimants, especially if they also have to go through the PIP assessment.

“And more fundamentally it’s based on a binary can-can’t work divide when we know the truth is that many people’s physical and mental health conditions fluctuate.

“The consultation on the Conservatives’ discredited WCA proposals was ruled unlawful by the courts.

“So today I can announce we will not go ahead with their proposals. Instead, we will scrap the WCA in 2028.

“In future, extra financial support for health conditions in Universal Credit will be available solely through the PIP assessment so extra income is based on the impact of someone’s health condition or disability, not on their capacity to work.”