An estimated £7.5 billion in Universal Credit benefits remain unclaimed in 2023 due to Department for Work and Pensions (DWP) complicated eligibility criteria, lack of public awareness, and poor communication from authorities. However, crucially this figure comes just as the Labour Party government has repeatedly claimed that welfare spending is too high – and that it wants to cut chronically ill and disabled people’s Universal Credit, even though so much goes unclaimed.
Universal Credit: billions left unclaimed
Despite Universal Credit’s supposed aim to provide financial support to society’s most vulnerable, huge numbers of people are not claiming it when they are entitled to.
In 2023 alone, an estimated £7.5 billion in support went unclaimed, with approximately 1.2 million households unaware they could qualify for assistance. This enormous figure, discovered by think tank Policy In Practice research, underscores critical flaws in the accessibility and clarity of a system intended to alleviate poverty and financial distress, prompting urgent calls for reform and better outreach.
A significant barrier to uptake lies in widespread confusion regarding who actually qualifies for Universal Credit. Reports from Citizens Advice reveal numerous scenarios where individuals miss out due to lack of awareness or misunderstandings about their entitlements.
For example, people facing unemployment, reduced income, or those living with disabilities that restrict employment capabilities often do not realise they could apply. Moreover, additional factors such as high childcare costs or caregiving responsibilities for a family member may also open eligibility—even though many remain unaware of these provisions.
Too complex and inaccessible
The problem is compounded by the fact that eligibility extends beyond simple income measurements and employment status. Universal Credit is designed to accommodate a range of personal circumstances, reflecting the complex and varied nature of financial hardship in the UK today.
Contrary to common belief, Universal Credit eligibility is not governed by a fixed income ceiling. Research from Policy in Practice indicates that households with relatively high annual earnings—even those exceeding £100,000 under certain conditions—might still qualify.
This challenges the widespread assumption that Universal Credit is solely for those in desperate financial conditions, highlighting the scheme’s flexibility in addressing multiple needs and situations.
Universal Credit eligibility
Furthermore, Citizens Advice stresses the importance of applying promptly, especially in light of planned changes to the health component of Universal Credit. These reforms will impact existing claimants differently from new applicants, potentially reducing access for those who delay their claims.
Acting swiftly thus becomes paramount to safeguarding the full range of benefits.
The criteria for Universal Credit eligibility are relatively inclusive. Generally, anyone aged 18 or over but below the UK’s state pension age, who permanently resides in the country and holds savings or investments below £16,000, can apply.
However, the rules are more intricate for younger claimants: individuals under 18 may also qualify if they have dependent children or face specific health conditions. This layered eligibility framework reflects an attempt to strike a balance between inclusivity and appropriate targeting but often leads to confusion among prospective applicants.
DWP communication failures and the need for empathy
Although the government publishes detailed eligibility guidelines on its official portal, this information is not always communicated effectively or accessed by those who need it most. The persistence of large sums of unclaimed benefits reveals a systemic failure by the DWP to relay clear, user-friendly guidance to the public.
Many potential claimants lack knowledge of their rights and entitlements due to complex language, bureaucratic jargon, and insufficient outreach to marginalised communities. Consequently, some individuals experience prolonged financial hardship when timely assistance was available.
Central to resolving Universal Credit’s uptake problem is fostering a more empathetic approach from the DWP. It must recognise that claimants’ lives are often complex, marked by unique challenges that a one-size-fits-all system struggles to address.
Moreover, empathy entails acknowledging the psychological burden of navigating a convoluted benefit system, which can discourage applications. Yet this is not how the DWP operates.
DWP Universal Credit: a perverse scenario
Most perversely, all this comes amid the DWP’s plans to cut chronically ill and disabled people’s Universal Credit. As the Canary previously reported, it is freezing chronically ill and disabled people’s Limited Capability for Work and Work-Related Activity (LCWRA) elements of Universal Credit, at £97 a week – and reduced them to £47 a week for new claimants – with only people with the most severe conditions able to apply for LCWRA. People under the age of 22 will no longer be able to claim these top-ups under Universal Credit at all.
In a society where economic pressures increasingly threaten financial stability, it is vital that support systems do not become additional sources of hardship.
Yet the very fact that over one million households are missing out on over £7 billion of Universal Credit – at the same time the DWP thinks it’s spending too much on these people – shows that currently, the polar opposite is happening.
Featured image via the Canary
