Annex A

Annex A

Dear Mr Lohan

Thank you for your Freedom of Information request received on 12 January. You asked for:-

I have tried to find out where my benefit comes from by using the phone service in my local job

centre, and i get told it comes from the government pot. If this is the case could i see evidence

of such pot a photo would be nice. If this is not the case could you please tell me in detail

where it comes from and how it is worked out. As far i as know it comes from my National

Insurance contributions, so id like to know also how to access these funds with out using the

local job centre to access my funds for me as this would benefit both party's.

It appears you are seeking further details of the National Insurance scheme, how this is used to fund benefit expenditure, how benefit rates are calculated and the requirement for Jobseekers to attend the Jobcentre. I will deal with each point in turn.

National Insurance

National Insurance is a comprehensive insurance system, which provides benefit for a whole range of contingencies; for example, sickness, retirement and bereavement, not just unemployment. For this reason, it's not appropriate to draw a comparison between the statutory National Insurance system and one run on the lines of commercial insurance.

Contributions to the National Insurance Fund are used to pay for contributory-based benefits such as contribution-based Jobseekers Allowance (JSA(C)) and contribution-based Employment Support Allowance (ESA(C)). Whilst an individual will have a National Insurance Contribution record, this is not a personal fund which is drawn down for that individual but provides entitlement conditions for contribution based benefits.

Income-based benefits are funded from current taxation receipts. Both National Insurance Contributions and tax revenues are collected by Her Majesties Revenue and Customs (HMRC).The Department has to provide annual estimates of such expenditure to Parliament in conjunction with HM Treasury. Subsequently annual accounts/ reports are prepared showing how the monies have been spent which are then scrutinised by the National Audit Office.

Calculating Benefit Rates

There is a legal requirement on the Department for Work and Pensions to review the rates of benefit each year. The revised rates are laid before Parliament for approval.

A number of factors are taken into account during the annual review of benefit rates, including the level of inflation. Two cost of living indexes are used to inform the review.

The first is the Retail Price Index (RPI), which is used for the benefits such as State Pension, Incapacity Benefit, Child Benefit as well as Statutory Maternity Pay, Statutory Sick Pay and War Pensions.

Income-related benefits (such as income-based JSA but also including contributory-based JSA) are increased by the “Rossi” index. This index is based on the RPI but excludes changes in rents and mortgages. Like RPI, therefore, it takes into account increases in a wide range of goods and services.

Requirement to attend the Jobcentre

As Jobseeker's Allowance (JSA) is intended to emphasise the link between searching for work and receiving benefit, the main conditions for receiving JSA are designed to ensure jobseekers are supported to keep in touch with the labour market. Jobseekers are required both:

i) to be available for work, and

ii) to actively seek work

in each week. They are also required to enter into a Jobseeker's Agreement.

The Jobseeker's Agreement is a means of tailoring help and advice to each unemployed person and sets out what the jobseeker intends to do to meet both the availability and actively seeking employment conditions. The agreement also sets out details of the support a jobseeker is entitled to expect from Jobcentre Plus staff. The Jobseeker's Agreement is, therefore key to ensuring that jobseekers are treated as individuals and receive individual help. Attendance at Jobcentres is a requirement designed to facilitate individuals' access to this help and to help them meet the conditions for the benefit.

If you have any queries about this letter please contact me quoting the reference number above.

Yours sincerely,

DWP Central FoI Team

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Your right to complain under the Freedom of Information Act

If you are not happy with this response you may request an internal review by e-mailing [DWP request email] or by writing to DWP, Central FoI Team, 5^th Floor The Adelphi, 1-11, John Adam Street, London WC2N 6HT. Any review request should be submitted within two months of the date of this letter.

If you are not content with the outcome of the internal review you may apply directly to the Information Commissioner's Office for a decision. Generally the Commissioner cannot make a decision unless you have exhausted our own complaints procedure. The Information Commissioner can be contacted at: The Information Commissioner's Office, Wycliffe House, Water Lane, Wilmslow Cheshire SK9 5AF www.ico.gov.uk

DWP Central Freedom of Information Team

e-mail: [DWP request email]

Our Ref:67/10

3 February 2010