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LSE report highlights benefits 'black hole' with 30 per cent of eligible household underclaiming

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At a public launch today (Wednesday 1 February), British Gas and its charity partners published a landmark report commissioned from the London School of Economics - Maximising the Benefits: an analysis of British Gas' benefit health check programmes - which quantifies the huge level of underclaiming of benefits by households mostly living below the poverty threshold.

The report, by research fellow Tom Sefton of LSE's Centre for Analysis of Social Exclusion| (CASE) coincides with new figures published by the Department for Work and Pensions on the take up of income related benefits, which shows that in 2003-04 between £4.2-£7.3 billion of benefit went unclaimed. The research analysed benefits 'health checks' delivered by the British Gas 'here to HELP' programme and the British Gas/Help the Aged Partnership to over 43,000 households, identifying unclaimed benefits worth nearly £25 million. Findings include:

  • Assessments show that 30 per cent of eligible households on benefits are underclaiming by an average £30 a week, or over £1,500 a year - due to lack of awareness of their entitlement or being daunted by the complexity of the system, as identified by the National Audit Office.
     
  • This average represents an increase in income of a quarter for a single person living on the poverty threshold, and 10 per cent for a couple with two young children.
     
  • In over 15 per cent of households the level of underclaim is more than £50 a week, or over £2,600 a year - enough in most cases to lift people out of poverty altogether.
     
  • Once benefits "health check" assessments are carried out, nearly three-quarters of those entitled to additional benefits go on to make a claim. In terms of value, over 90 per cent of the benefits identified are claimed.
     
  • The report says that the benefit health check programmes run by British Gas 'overcome several barriers' identified by the National Audit Office which deter people from claiming, and play an 'important role in raising take-up rates', thus helping the Government achieve its targets.
     
  • British Gas benefit advice through 'here to HELP' and the Help the Aged Partnership has been provided to over 43,000 households since 2002, identifying unclaimed benefits worth nearly £25 million.
     
  • The 'here to HELP' scheme has shown that benefit "health check" assessments are a low-cost means of delivering benefits take-up.

Mish Tullar, head of communications at British Gas, said: 'The Government's own figures reveal an enormous underclaim in the benefits system - up to £7 billion of income-related benefits go uncollected - which underlines the importance of the LSE's research.

'The LSE report finds that around a third of households eligible for benefits are underclaiming - by an average of £30 a week. That is a significant figure - a benefits 'black hole' causing unnecessary hardship. At least 2.5 million households across the country are not claiming the income-related benefits to which they are entitled.

'To put it in context, an extra £30 a week can deliver increased income of up to a quarter for households on the poverty line. This report shows just how effective benefit health checks can be in boosting income. As the Government's figures make all too clear, not enough is being done to ensure that people claim their full entitlement.'

Tom Sefton, said: 'In their report on take-up of benefits among pensioners, the National Audit Office identified ten key barriers to claiming benefits, including the complexity of the overall benefits system, problems obtaining information and advice, misconceptions about the benefits available, difficulty completing forms, and fear of stigma or of becoming dependent on benefits.

'Benefit health checks - such as those provided by British Gas - help to overcome several of these barriers, by providing accurate information on the amount of benefits someone should be receiving and reinforcing the notion of entitlement, helping to change the perception of benefits as 'handouts'.'

Ends

Contact Tom Sefton|, CASE, on 020 7955 7613 or email: t.a.sefton@lse.ac.uk| 

Contact Kevin Pringle, British Gas Corporate Affairs, Tel: 0131 344 6860 or the 24-hr media line on 07979 566244. Website 

Press cuttings

Daily Mirror
Your money: families' missing millions (1 Feb 06)
Research by LSE for British Gas, which is to be published today, shows that more than 2.5 million families in the UK are failing to claim all the benefits they are entitled to. One in three miss out on average of £30 a week, or £1,500 a year.

1 February 2006

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