Charities call for benefits shake up after £16bn goes unclaimed

By Elliot Wright, 3rd February 2010

The government needs to do more to ensure people receive the benefits they are entitled to, says a coalition of charities.

The 27 charities, led by Citizen's Advice, are calling on the government to set "ambitious targets" for the take-up of the benefits after it was revealed that over £16bn in means-tested benefits and tax credits goes unclaimed every year.

The group have written to Secretary of State for Work and Pensions Yvette Cooper to ensure that money earmarked for children, families and pensioners in greatest need reaches those for whom it was intended.

They have highlighted glaring examples of where benefits take-up is falling far short. The latest figures show that:

• as many as four out of five low paid workers without children (1.2bn households) miss out on tax credits worth at least £38 per week - a total of £1.9 billion
• as many as half of all working households entitled to housing benefit (worth an average £37.60 per week) do not claim it - that's up to half a million households.

Research also shows that up to three million households are missing out on an average £13 a week in council tax benefit, while as many as 1.7m pensioners are missing out on an average of £31 a week in pension credit.

Three million households are missing out on an average £13 a week in council tax benefit

Take-up of housing benefit and council tax benefit have both fallen over the last decade, while take-up of child tax credit is far lower in London than in other parts of the country, and generally 10% lower among families from minority ethnic backgrounds.

Citizens Advice blamed the alarming figures on a complex claiming system and general lack of knowledge amongst those who are entitled to benefits but are put off by a seemingly daunting application process.

Citizens Advice Chief Executive David Harker said: "It's absolutely vital that the government sets ambitious take-up targets for means-tested benefits and tax credits as an important step towards tackling poverty and providing adequate incomes for all."

"The benefits and tax credits system is extremely complicated and the reasons people don't claim what they're due are complex, ranging from simply not knowing about the benefit concerned, to being put off by what can sometimes seem a very daunting process, to feeling that the amount they gain will be negligible. But all too often they are missing out on substantial amounts of extra cash that could make all the difference between getting by or going under.

"We would urge people to get a free, confidential and independent benefit check at their local CAB.  Our advisers deal with 8,000 new benefit enquiries every working day and can help people navigate the complexities of the system, identifying all the extra help they should be getting and assisting with the claims process. Along with other concerned charities we are now challenging the government to invest the same amount of energy and effort into ensuring people get what they are entitled to as they put into cracking down on benefit fraud."