£23 billion of support is unclaimed each year: how do we close the gap?

By Rachael Walker, Policy and Research Director at Policy in Practice

Access to financial support through the welfare state is a right. Yet the system is at least £23bn short of providing for everyone in need.

With the links between poverty, health, and public services well established, maximising income through the take up of benefits is essential to help both people on low incomes and public services cope in the face of rising living costs and increasing demand.

Chart 1: £23 billion in unclaimed benefits and support

Why are benefits going unclaimed?

1. A lack of awareness: Benefits often go unclaimed because many people are unaware of what they can claim. Lack of awareness and placing the onus on claimants is particularly harmful for older people – our analysis suggests pensioners might be missing out on £5.2 billion in Attendance Allowance due to lack of knowledge about eligibility.
2. Administrative complexity: The system is, to put it mildly, complex. Multiple application methods, different administering bodies, and varying eligibility criteria and conditionality regimes create an administrative obstacle course for claimants. People in poverty often face extreme stress, made worse by navigating complex systems, and further exacerbated by online services, as approximately 8.5 million UK adults lack essential digital skills to access online services.
3. Stigma: Benefits continue to be associated with a sense of stigma and shame by many individuals who disengage with the social security system as a result. Benefits claimants are often cast as being ‘undeserving’, and surveys have found that up to a quarter of respondents eligible for but not claiming Universal Credit cited ‘benefits stigma’ as their main reason for not making a claim. Negative media reporting on benefits can increase stigma. A recent campaign by Policy in Practice focussing on increasing take up of Pension Credit amongst older Londoners found stigma to be a powerful barrier to claiming the benefit.

How can we close the £23 billion gap?

1. Reduce complexity: Address the system as a whole. Technology is outpacing policy, creating a stagnant infrastructure. Better use of data can bring benefits to claimants and efficiencies to taxpayers alike. These can include greater sharing of data across government, enabling data to be used to link entitlements and passport claims, joining up application routes, and allowing claimants to give their consent for data to flow between organisations.
2. Raise awareness: Change the messaging around benefits. The DWP has a responsibility to ensure that the right people are paid the right benefits at the right time. Targets should be set by the DWP to maximise take up of support through job centres and local authorities. Simple actions such as encouraging people to claim and ensuring that benefit entitlement checks are performed at contact could make a big difference.
3. Be proactive: Share data across the social security system. We already see the benefits of sharing information systemically. But more can be done. For benefits such as social tariffs or Free School Meals, unlocking the proactive power of data to consolidate applications can be transformative, easing the burden for applicants whilst streamlining administration.

We can make a difference

We’ve put more than £750 million in the pockets of low income households missing out on benefits they are entitled to by right. We do this through smarter use of data in our LIFT platform, and by guiding people through their entitlements using the Better Off Calculator.

Meanwhile, we continue to call for greater transparency over claimed and unclaimed support levels across the spectrum of benefits available for working age and pension age households. We also urge the government and its partners to improve the flow of data across the welfare system to further unlock the potential of administrative data and proactively deliver a more efficient, streamlined social security system.

To find out more about how you can make a difference in your area, contact Policy in Practice at hello@policyinpractice.co.uk.

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This article is featured in our 24 July newsletter.

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