Report on the Uptake of Benefits by Pensioners

Report_45_11_15.pdf (807.17 kb)

Executive Summary

1. Almost 20 per cent of Northern Ireland's 307,000 pensioners are classified as living in poverty. Given that social security benefits make up a significant proportion of pensioners' income, ensuring that they receive their full entitlement to these benefits can help reduce pensioner poverty.

2. Paying vulnerable pensioners their full entitlement is not only morally right, but also represents an opportunity to inject a significant amount of additional funding into the local economy. Benefit expenditure does not come out of the Assembly's Block grant from Westminster and does not therefore compromise the delivery of other public services.

3. The Department for Social Development (DSD) does not currently have an accurate estimate of the size of the benefit uptake gap. The Committee is nevertheless extremely concerned that the last published figures suggested that unclaimed pensioner benefit was most likely to be in the region of £100 million a year for pension credit and housing benefit alone. This is quite simply unacceptable.

4. In the absence of sound estimates, the overall impact of actions to improve uptake cannot be measured. The proposed research work in this area must be initiated with immediate effect to produce robust uptake estimates, inform uptake strategy and set challenging targets for the future.

5. DSD has run a series of annual benefit uptake programmes since 2005. Over this period, the department has targeted over 112,000 pensioners and generated an additional £23 million of benefits for successful claimants. For each pound spent on the programme, £11 in increased benefits has been claimed. Although the Social Security Agency (SSA) stated that its targeting is intelligence-led, the response and conversion rates remain too low. Less than half of all those contacted replied and, in total, only 9 per cent were successful in obtaining additional benefits.

6. The Committee attaches considerable importance to providing a comprehensive outreach service for the more vulnerable in our society, and there are potentially significant benefits to be derived from the community work undertaken by outreach officers. However the Committee is concerned that the level of resources committed to outreach activities may not be sufficient to promote uptake by pensioners. The Committee is also concerned that the outreach work of the three benefit-paying agencies is not sufficiently joined up and may not complement the activities of the voluntary and community sectors at grassroots level.

7. DSD highlighted two recent initiatives, its 'Make the Call' campaign and a new Innovation Fund, as examples of other uptake activities. These new initiatives are welcomed, and it will be important to track how they perform in order to draw out lessons for future uptake promotional activities.

8. Legislation permits the sharing of data for the purposes of identifying eligibility and improving uptake. However, data sharing to date appears to have been piecemeal in nature and lacking in a coherent vision and strategy. In the Committee's view, progress in undertaking data-sharing exercises has been unnecessarily slow, and there is more to be done in this area to reap the full benefits. The proposed introduction of legislative powers to share the personal data held by Her Majesty's Revenue and Customs (HMRC) carries huge potential, and priority must be given to progressing work in this area.

9. Pensioners can be reluctant to engage with government agencies and share their personal circumstances with officials. Conversely, the independent advice sector and other voluntary and community bodies are perceived as trusted third parties. Benefit-paying agencies must work proactively and strategically with the voluntary and community sectors as a means of targeting hard-to-reach groups.

10. The current benefit system is complicated, and many pensioners do not understand the way in which the system works. This reinforces the need to continue with efforts to simplify the benefit regime. None of the benefit-paying agencies can afford to be complacent on this matter.

11. Benefit-paying agencies must offer assurance to the public that benefit entitlement will be calculated correctly first time. The Committee is therefore concerned at the extent of historical underpayments and overpayments. There needs to be basic improvements in administration to remedy these errors.

12. Under welfare reform, there will be a move towards a single-tier pension and Housing Benefit will be abolished. It is therefore important that the benefit-paying agencies rigorously appraise the potential implications of these changes on uptake rates. It is also important that the process of welfare reform is used to review how benefits are delivered — citizens have a right to expect a one-stop shop, and welfare reform provides an opportunity to deliver this.

Summary of Recommendations

Recommendation 1

1. By helping to maximise benefit uptake among pensioners, benefit-paying agencies can make a considerable contribution to reducing poverty levels in Northern Ireland. The Committee recommends that the benefit-paying agencies formally adopt improving uptake as a core business objective to ensure they are actively contributing to the cross-departmental challenge of combating poverty.

Recommendation 2

2. There are no robust estimates of benefit uptake rates for pensioners. The Committee recommends that research work in this area is initiated with immediate effect and is used to produce robust uptake estimates, inform uptake strategy and set challenging targets for the future. The Committee wishes to be informed of the results of the planned research work involving the Joseph Rowntree Foundation and the Institute for Social and Economic Research when it is completed.

Recommendation 3

3. The low conversion rates for the Benefit Uptake Programme are disappointing. Of most concern is the fact that the majority of those contacted through these targeted campaigns do not respond. The Committee recommends that DSD develops a range of options to follow up initial contacts in order to improve the overall response and conversion rates.

Recommendation 4

4. The Committee believes that the impact of outreach activities could be increased if benefit-paying agencies consolidated their effortsand worked more closely with the voluntary and community sectors to promote pensioner uptake. The Committee recommends that the benefit-paying agencies jointly review their arrangements in this area and develop proposals to co-ordinate working practices and more fully engage with the voluntary and community sectors.

Recommendation 5

5. The Innovation Fund and the 'Make the Call' campaign represent two new initiatives aimed at promoting higher levels of uptake and it will be important to compare their success with the Benefit Uptake Programme. The Committee recommends that these are fully evaluated with a view to mainstreaming successful elements of the respective initiatives.

Recommendation 6

6. Data-sharing across Government bodies is an effective means of identifying individuals with unclaimed benefit entitlement, but this work needs to be done more strategically. The Committee recommends that the benefit-paying agencies develop a joint Data-Sharing Strategy, supported by a detailed Action Plan. In addition, the Committee recommends that each agency measures and reports the extent to which the revised arrangements actually improve uptake.

Recommendation 7

7. The proposed data-sharing arrangements with HMRC are welcomed. The Committee recommends that DSD agrees a clear timetable and makes arrangements for introducing the necessary legislation, developing protocols and undertaking data sharing exercises with HMRC.

Recommendation 8

8. Working proactively and strategically with the voluntary and community sectors can help benefit-paying agencies to target vulnerable clients and overcome some barriers to pensioner uptake. The Committee recommends that the Department:
engages and consults with the sectors earlier in the policy development process; andworks in partnership to ensure that outreach activities are co-ordinated between the respective sectors to ensure they better reach the relevant target groups.

Recommendation 9

9. Ongoing work to simplify application processes is welcome. However, the system remains complex. Given advances in technology, the Committee recommends that benefit-paying agencies develop a fully integrated, web-based access tool for all benefits.

Recommendation 10

10. Given the vulnerability of this client group, the Committee recommends that benefit-paying agencies use discretion and adopt a sensitive approach in communicating news to pensioners of overpayments; and explain in full to pensioners all available repayment options.

Recommendation 11

11. Welfare Reform provides an opportunity to review the administration and delivery of benefits. The Committee recommends that DSD and DFP consider whether a single agency can be tasked with providing a joined-up benefits service.

Download the full report here