Written evidence from Dr Lavinia Mitton CLP0052
I am a Senior Lecturer in Social Policy at the University of Kent. My PhD was a piece of original research on the objectives and outcomes of means testing of social security benefits in Britain. I have extensive expertise in the analysis of government policy on welfare benefits. I am writing in a personal capacity.
I am responding to question 2(a) in the Committee’s call for evidence: What role has passporting played in access to the cost of living support payments?
Key messages
Policy context
‘Passported benefits’ are benefits or schemes which people are entitled to because of their entitlement to certain other benefits or tax credits. The person does not need to provide proof of any other income or capital while they are entitled to a passported benefit. Cost of living support payments were passported benefits. People were entitled to cost of living support payments if there were getting any of these means-tested benefits:
This submission refers to the following benefits as ‘Legacy Benefits’ (LB): Income-based Jobseekers Allowance, Income-related Employment and Support Allowance, Income Support, Housing Benefit, Child Tax Credit, and Working Tax Credit.
Not all eligible individuals claim the benefits to which they are entitled. Therefore, an unintended consequence of passporting is that if a person was not in receipt of any of the above benefits despite being eligible, they were unable to receive cost of living support payments.
Why non-take-up is a concern
The Committee is right to consider the drawbacks of passporting. The proportion of those eligible who choose to enrol for a welfare benefit is called the ‘take-up rate’. Imperfect take-up reduces the positive impact that social welfare schemes, such as cost of living support payments, could otherwise have. When eligible claimants do not receive benefits to which they are entitled, they may experience financial difficulties and lack access to essential goods and services. While non-take-up reduces public expenditure in the short run, it can exacerbate public spending in the longer term because of the negative effect it has on the life chances of individuals. Furthermore, the estimates of the effects of policy changes can be seriously compromised if the intended recipients of welfare benefits end up not claiming them.
Non-take-up behaviour is not evidence that potential recipients do not need or want the financial help. Rather, there are a variety of reasons why take-up of means-tested benefits is generally well below 100%. Such factors include high claiming costs, administrative errors, lack of information about entitlements, and fear of stigma.
The extent of non-take-up
Estimates of take-up rates are obtained by dividing the number of actual recipients by the number of eligible recipients. The research literature, while limited, shows that a significant proportion of individuals or households eligible for social benefits do not claim them. For example, independent estimates by entitledto, a leading independent provider of online benefit calculators in the UK, suggests about £15 billion of benefits remain unclaimed each year (Agulnik, 2022). Table 1, taken from a recent international review by Ko and Moffitt (2022), shows that take-up rates in the UK vary widely depending on the nature of the target population and the characteristics of the benefit, but are generally well below 100%.
Table 1: Take-up rates of welfare benefits in the UK
Source: Ko and Moffitt (2022, page 47).
Since 1997 the Department of Work and Pensions (DWP) has regularly published estimates of take-up rates for various benefits. Recently, however, estimates have only been published for pension age income-related benefits (Pension Credit and Housing Benefit for pensioners), with DWP announcing that no statistics would be released for 2020 and 2021 due to data issues related to the Covid-19 pandemic.
Consequently, comparatively little is known about whether take-up has increased or decreased after the rolling out of Universal Credit. Theoretically, there are opposing forces that would explain why take-up rates for LB differ from UC: On the one hand having a unique benefit replacing multiple measures could make claiming easier, on the other hand it could increase stigma and therefore deter claiming. Other issues that are currently poorly understood include which groups in society are more inclined not to claim benefits, and whether non-claiming is a temporary or persistent behaviour. This makes it difficult to determine the characteristics of the eligible people who were prevented from accessing passported cost of living support payments.
Reference list
Agulnik, P. (2022) ‘Our annual review suggests about £15 billion of benefits remain unclaimed each year’, entitledto, 25 February 2022. Available at: https://www.entitledto.co.uk/blog/2022/february/our-annual-review-suggests-about-15-billion-of-benefits-remain-unclaimed-each-year (Accessed: 12 May 2023).
Ko, W., & Moffitt, R. A. (2022). Take-up of social benefits (Working Paper 30148). National Bureau of Economic Research.
May 2023