300,000 “forgotten unemployed” people aren’t accessing the state support to which they are entitled

Around 300,000 unemployed or very low earners in Britain are missing out on much needed financial support from the state worth at least £73 a week, according to a new report published today (Tuesday) by the Resolution Foundation.

Falling through the cracks examines official unemployment statistics and claimant count data to see how our welfare state supports people on the margins of our labour market.

The report identifies around 300,000 people in need of financial support who aren’t claiming unemployment benefits that they are entitled to. The group of the ‘forgotten unemployed’ mostly comprises older people (especially women aged 55-64) and younger men.

While the vast majority of the group are unemployed, a significant minority are in work but on such low hours that they are still entitled to out-of-work support. Individuals are able to earn up to £80 a week and still claim Jobseekers Allowance, or £116 a week under Universal Credit.

Members of this group are missing out on at least £73.10 a week (the current value of Jobseekers Allowance/standard Universal Credit allowance for those aged 25 and over). However, they could potentially be missing out on far more if they are also entitled to passported benefits such as maternity grants, energy discounts and free school meals.

One of the reasons why this group has been forgotten has been due to policy makers largely ignoring the growing gap between the number of unemployed people and the number claiming unemployment benefits that has emerged since the late 1990s.

The report notes that there are a number of reasons for this growing gap – including an increasing share of unemployed people who have good reason to not claim benefits. It notes for example that two in five unemployed people today are either living with a working partner or at home with their parents (up from around one in four in 1996) and therefore have other sources of income.

However, the Foundation says that it is time that the 300,000 forgotten unemployed people who do need to claim benefits but don’t are acknowledged – both in the official unemployment statistics and in terms of government support.

The report calls on the government to do more to boost benefit take-up by those in need of support, arguing that the ongoing roll-out of Universal Credit provides an opportunity to refocus on those at the margins of the labour market. To support this, the Foundation is calling on the Office for National Statistics to identify a new proxy measure of people eligible and in need of support.

David Finch, Senior Economic Analyst at the Resolution Foundation, said:

“Over the last twenty years, a growing number of unemployed people are not claiming unemployment benefits.

“Policy makers have generally been pretty relaxed about this gap, assuming that is largely due to people finding new work very quickly, or having other sources of financial support at home.

“But while there are good reasons for some people not to claim benefits, there are also around 300,000 forgotten unemployed people who are falling through the cracks and not getting the financial support that they need and are entitled to.”