New analysis by Policy in Practice finds that the total amount of unclaimed income-related benefits and social tariffs is now £18.7 billion a year.
The research estimates that £7.5 billion of Universal Credit is unclaimed by 1.2 million eligible households and £2.9 billion of Council Tax Support is unclaimed by over 2.7 million eligible households each year. The research estimates that one in four low-income households will not have enough money for basic household costs.
Council Tax Support is the most underclaimed, with 2.7 million people missing out on £2.8 billion of support.
Social tariffs are also significantly underclaimed with broadband social tariffs having the lowest take-up, with 97% of eligible households missing out on the tariffs.
Many families, especially those in work, do not apply because they believe that Universal Credit only covers people who are out of work or on very low incomes.
Benefits go unclaimed because of a complex interaction of factors. These include:
- Administrative complexity: The sheer complexity of multiple application mechanisms, administering organisations, eligibility criteria and conditionality create a barrier for many people who are trying to navigate the system and access support. Dealing with this complexity ratchets up pressure on people in poverty, exacerbating the stress that goes hand-in-hand with not having enough money
- A lack of awareness: Many claimants are simply unaware that they can claim support given their circumstances or income. This research was partly inspired by recent analysis on benefit entitlements for clients in the financial services and utilities sectors. That work resulted in first time claimants gaining over £4,000 a year and existing claimants typically gaining over £1,500 a year
- Increasing fragmentation of support: The inadequacy of means-tested benefits is driving a growing patchwork of discretionary and other support schemes. Help generally goes to those who already know about the schemes and can navigate often complicated application processes, rather than those most in need. Also, local funding drives geographical differences in provision. This creates postcode lotteries for available support, and unequal conditions to access it
- Stigma: Negative perceptions around claiming benefits may discourage eligible people from engaging in the benefit system. A related factor behind the non-take up of benefits is the deliberate barriers in the system that act as gatekeepers to access, such as the threat of sanctions, and in-work search conditionality. Whilst these measures are intended to ensure people do not receive what they are not eligible for, they can also deter eligible households from claiming benefits altogether
