03 February 2006
The government was this week accused of failing Britain's poorest groups after it emerged that up to £7bn in benefits went unclaimed in 2003/04, while take-up of key welfare payments has fallen since Labour came to power.
Research published this week by the Office for National Statistics shows that as much as 20% of the £35bn set aside for income-related benefit payments in Britain went unclaimed in 2003/04, with take-up lowest among pensioner groups and those entitled to housing support.
As many as 30% of people entitled to claim the six ONS-analysed benefits – income support, housing benefit, council tax benefit, Pension Credit, Jobseeker's Allowance and the pension Minimum Income Guarantee – did not do so.
Housing benefit take-up, the ONS said, had fallen 'significantly', by as many as seven percentage points since 1997/98, despite several major government and local government initiatives to encourage take-up.
That led to calls from the Trades Union Congress and Age Concern for the government to reduce its use of means-tested benefits, which feature high on the list of payments blighted by low take-up.
As many as 42% of pensioner households (around 1.8 million people) failed to claim up to £2.4bn in Pension Credit, while 47% of those entitled to claim up to £1.1bn in council tax support (almost 2 million people) did not do so.
Both are means tested and Department for Work and Pensions research has shown that means testing discourages take-up by stigmatising claimants, or by simply discouraging people from having their finances analysed by public bodies.
The London School of Economics recently reported that potential claimants are 'baffled' by the complexity of application forms.
Anna Pearson, an Age Concern spokeswoman, said the picture painted by the ONS was 'bleak'. 'Instead of offering warm words on pensioner poverty, it's now time for the government to end unfair means testing on benefits so as to drive up take-up rates.'
Pearson called for 'automatic payment' of council tax benefit and an increase in the basic state pension to prevent the need for means testing.
Richard Exell, senior welfare policy officer at the TUC, told Public Finance the time was right to reduce, but not scrap, the government's reliance on means testing. 'There are very difficult financing decisions to be considered, but the TUC would back a return to more benefit payments linked to National Insurance contributions.
'It would be very worrying for the government if take-up of benefits by case-load [number of people entitled to claim] decreased significantly, because the key benefits in the ONS report, along with tax credits, are vital to the government's plan to end child poverty.'
The ONS is due to report this summer on the latest figures for British households whose incomes fall below average. Exell said those figures would be crucial to the success of the government's interim plan to reduce child poverty by a quarter by 2005 and half by 2010.
'Take-up of benefits [assessed by the ONS] will be crucial to how many households fall into the “below average” category, affecting poverty rates,' he added.
Overall, the ONS figures published on January 31 show that while take-up of income support and the Minimum Income Guarantee have remained stable since 1997/98, take-up for the other four benefits has fallen since Labour came to power.
A DWP spokeswoman said that was 'disappointing'. But Stephen Timms, minister for pension reform, said: 'These figures relate to 2003/04. Since then we have introduced many initiatives aimed at ensuring that people claim their entitlements. The Pension Service has already carried out 740,000 home visits since April 2005, and has been phoning those who may be entitled [to claim], as well as running local campaigns.'
DWP officials also pointed to the continually high take-up rate for income support – up to 95% of all potential claimaThe government was this week accused of failing Britain's poorest groups after it emerged that up to £7bn in benefits went unclaimed in 2003/04, while take-up of key welfare payments has fallen since Labour came to power.
Research published this week by the Office for National Statistics shows that as much as 20% of the £35bn set aside for income-related benefit payments in Britain went unclaimed in 2003/04, with take-up lowest among pensioner groups and those entitled to housing support.
As many as 30% of people entitled to claim the six ONS-analysed benefits – income support, housing benefit, council tax benefit, Pension Credit, Jobseeker's Allowance and the pension Minimum Income Guarantee – did not do so.
Housing benefit take-up, the ONS said, had fallen 'significantly', by as many as seven percentage points since 1997/98, despite several major government and local government initiatives to encourage take-up.
That led to calls from the Trades Union Congress and Age Concern for the government to reduce its use of means-tested benefits, which feature high on the list of payments blighted by low take-up.
As many as 42% of pensioner households (around 1.8 million people) failed to claim up to £2.4bn in Pension Credit, while 47% of those entitled to claim up to £1.1bn in council tax support (almost 2 million people) did not do so.
Both are means tested and Department for Work and Pensions research has shown that means testing discourages take-up by stigmatising claimants, or by simply discouraging people from having their finances analysed by public bodies.
The London School of Economics recently reported that potential claimants are 'baffled' by the complexity of application forms.
Anna Pearson, an Age Concern spokeswoman, said the picture painted by the ONS was 'bleak'. 'Instead of offering warm words on pensioner poverty, it's now time for the government to end unfair means testing on benefits so as to drive up take-up rates.'
Pearson called for 'automatic payment' of council tax benefit and an increase in the basic state pension to prevent the need for means testing.
Richard Exell, senior welfare policy officer at the TUC, told Public Finance the time was right to reduce, but not scrap, the government's reliance on means testing. 'There are very difficult financing decisions to be considered, but the TUC would back a return to more benefit payments linked to National Insurance contributions.
'It would be very worrying for the government if take-up of benefits by case-load [number of people entitled to claim] decreased significantly, because the key benefits in the ONS report, along with tax credits, are vital to the government's plan to end child poverty.'
The ONS is due to report this summer on the latest figures for British households whose incomes fall below average. Exell said those figures would be crucial to the success of the government's interim plan to reduce child poverty by a quarter by 2005 and half by 2010.
'Take-up of benefits [assessed by the ONS] will be crucial to how many households fall into the “below average” category, affecting poverty rates,' he added.
Overall, the ONS figures published on January 31 show that while take-up of income support and the Minimum Income Guarantee have remained stable since 1997/98, take-up for the other four benefits has fallen since Labour came to power.
A DWP spokeswoman said that was 'disappointing'. But Stephen Timms, minister for pension reform, said: 'These figures relate to 2003/04. Since then we have introduced many initiatives aimed at ensuring that people claim their entitlements. The Pension Service has already carried out 740,000 home visits since April 2005, and has been phoning those who may be entitled [to claim], as well as running local campaigns.'
DWP officials also pointed to the continually high take-up rate for income support – up to 95% of all potential claimants – as evidence that successes could be maintained.
PFfeb2006
