The takeup of benefits:
lessons from the UK
Paul Spicker
Robert Gordon University
Benefits in the United Kingdom
National
Insurance
• State pension
• Employment and Support
Allowance
• Jobseekers Allowance
Minimum
incomes
• Jobseekers Allowance
• ESA
• Pension Credit
Tapered
Benefits
• Housing Benefit
• Tax Credits
‘Non• Disability Living
contributory’
Allowance/ PIP
• Attendance Allowance
(tests of
• War Pensions
need)
Universal
benefits
• Child Benefit
• Over 80s pensions
• Winter Fuel Payment
Discretionary • Local welfare assistance
benefits
• Social Work payments
Public spending on benefits
Tax
Credit
State
pension
£83 bn
HMRC
£40.3
bn
Child
Benefit
Total
Expenditure
£204.4 bn
Older
people
£110.7
bn
Disability
Other
benefits
JSA/
Income
Support
DWP
£53.4
bn
Disability
Housing
Benefit
Housing
Benefit
ESA/IB
The Poor Law and the Welfare State
The Poor Law
The Welfare State
Stigma
Rights
Selectivity
Universality
Welfare as a ‘public
burden’
“From the cradle to
the grave”
Local discretion
Uniform, national
administration
Myth 1: The Welfare State would abolish
poverty
Myth 2: Older people would gradually forget
Myth 3: Rights would overcome stigma
Means testing
The reasons identified for low
take-up
Policies to avoid meanstesting (1970s)
Extending National Insurance
Ignorance
Complexity
Stigma
Marginal benefit
Invalidity Benefit
Non contributory benefits
Attendance Allowance
Mobility Allowance
Non-contributory Invalidity
Pension
Extending universal benefits
Child Benefit
One-parent benefit
Targeting
The return to means-testing (1980s
and after)
Refining the target
Tapered benefits
Type 1 errors: wrongful exclusion
Type 2 errors: wrongful inclusion
– Rate Rebate, Community Charge
Benefit, Council Tax Benefit,
Council Tax Reduction
– Unified Housing Benefit
– Family Income Supplement, Family
Credit, Tax Credits
The collapse of National Insurance
for unemployed people
The resurgence of selectivity
The methods
Tightening eligibility criteria
“Computermania”
Purging benefit fraud
Segmenting – refining responses to
client groups
The problems of targeting
Problems of selectivity
Problems of means testing
complexity
exclusion
non-takeup
equity
costly administration
intrusiveness
boundary problems
threshold definition and
tapers
capital
equivalence and household
composition
changing circumstances
self-employment
the ‘poverty trap’
Two models of takeup
Burton Weisbrod:
Costs and benefits
Scott Kerr:
Thresholds
Costs:
Information
Stigma
Access
1.
2.
3.
4.
5.
6.
Benefits:
Marginal benefit
Utility
Perceived need
Basic knowledge
Perceived eligibility
Perceived utility
Beliefs and feelings
Perceived stability of
circumstances
7. Making a claim
The take-up of various benefits
Type of benefit
Estimates of %
takeup by
eligible
recipients
Estimates of %
money due being
claimed
Child Benefit
Universal
95-96%
Child Tax Credit
Tapered
83-87%
92-95%
Housing Benefit
Tapered
78-84%
84-90%
Income Support plus ESA
Minimum income
77-89%
82-92%
Working Tax Credit
Tapered
63-68%
82-87%
Pension Credit
Minimum income
62-68%
73-80%
Council Tax Benefit
Tapered
62-69%
64-71%
Jobseekers Allowance
Insurance/
minimum income
60-67%
61-70%
Disability Living Allowance –
mobility component
Non-contributory
50-70%
Attendance Allowance
Non-contributory
40-60%
Disability Living Allowance –
Non-contributory
30-50%
Some things we know, some we don’t
Pensioners
Similar rates for Housing Benefit
Unknown capital holdings
Reluctance to identify disability
Couples
Persistently lower claims than for
single people
Employment
Different rates for Housing Benefit
Problem of fluctuating income
Precarious work/
sub-employment
Some grounds for scepticism
Why are Tax Credits > basic
means tests?
Why is Attendance Allowance >
DLA care component?
Why is Housing Benefit > Council
Tax Reduction?
Why are lone parents more likely
to claim than single
pensioners?
What works?
City of Ypres, Forma Subventionis Pauperum,
1531
Stability and
predictability
Outreach
Personal support
Many people are so naturally ashamed and
fearful, that they would rather hide their need
than disclose it, and they live at home in serious
want. Because of them, it has been decreed that
people who are needy secretly and in private
should be searched out. Those who are ashamed
to be seen shall be visited, and those who are too
ashamed to take anything shall be given support.
Men will go to the houses of those who do not
dare speak to us or to come to our gates. We
think it best not to delay unless they are driven,
through the loss of this honest humility, to show
their deprivation and need. They must be helped,
privately and promptly, lest they are lost by our
negligence, when they are just those who a
caring charity requires us to help.
Welfare reform:
how benefits have been changing
•Personalisation
Work testing
Conditionality
• Means
testing
• Personalised
assessments
• Responses in
‘real time’
• ESA
• Lone parents
• “Work for
your benefit”
• New rules for
jobseekers
• Compulsory
entry to
programmes
• ‘Intensive
intervention’
• Sanctions
Who are the target groups?
Does universal coverage still matter?