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In a move that will bring new hope to struggling payday lenders, the DWP have extended the waiting days for employment and support allowance (ESA) and jobseeker's allowance (JSA) from 3 days to 7 days from today.

The new rules mean that claimants applying for ESA or JSA will not be entitled for any payments during the first 7 days that they would otherwise be eligible for benefits.

Claimants will not be affected if they have made a previous claim for ESA or JSA in the preceding three months, however, as they will be considered to have already served their waiting days. ESA claimants will also not be affected if they have claimed statutory sick pay immediately before claiming ESA.

Terminally ill claimants are exempt from serving waiting days.

The move has brought condemnation from trade unions and charities, but the chancellor George Osborne argues that: “Those first seven days should be spent looking for work and not looking to sign on.”

Last month Wonga was forced by the Financial Conduct Authority to write off £220 million in loans interest and charges to people who should never have been given loans in the first place. There have been calls for other payday lenders to suffer similar penalties.

But the decision by the Coalition to extend the waiting period for ESA and JSA to seven days means that there is likely to be an upsurge in applications for short-term loans by people with no other resources to fall back on.

Given that waiting times for a first payment of universal credit (UC) are likely to be around 6 weeks – and up to six months for people whose earnings were too high, according to new government proposals - and bearing in mind that UC also includes a housing costs element, the future for payday lenders is beginning to look rosy again.

Comments  

+1 #3 Camly91 2014-10-28 16:27
errrrr if you're claiming ESA why would you be spending 'those 1st seven days looking for work" when your being too ill to work is the whole reason youre claiming ESA in the first place! duh
+3 #2 BigYin 2014-10-27 15:35
The Tories want to demolish the welfare state totally and the NHS likewise.
+2 #1 angela 2014-10-27 09:23
When is all this going to end every day more cuts to benefits there will be nothing left to claim soon which is what this government is after

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