Should social security reach further?

Ineligibility for benefits

at the start of COVID-19 

The full report is available here, and a blog by the Health Foundation is here (published May 18th 2021)

The data and replication file are available via the Open Science Foundation.

Note that the report/summary was corrected on May 18th to make clearer that the estimates were among people who may have been struggling financially.

About this report

The situation of those who were ineligible for benefits but who may be in financial need has been given little attention. In this report, we present the findings of exploratory research into this group, funded by the Health Foundation.

Among people who may have been financially struggling, we estimate that in July-August 2020 there were:

  • 200,000 people ineligible for Universal Credit (UC) solely due to their partner’s earnings;

  • 200,000 people ineligible for UC solely due to their savings; and

  • At least 50,000 people ineligible for UC solely due to migration status.

More broadly, we estimate that there were about half a million (480,000-540,000) people who had lost 10% or more of their income during the pandemic and may have been financially struggling but were ineligible for both UC and contributory benefits (new style JSA). Half of this group overlaps with the three previous groups, but half of this group were ineligible for UC for more than one reason.

These are mostly not employees that had completely lost their jobs, but were instead primarily people with reduced income/hours (including furlough) or who were self-employed and not getting enough work. Levels of financial strain among most of these groups was relatively high (with the exception of those ineligible solely due to savings).  Around 40% of each group reported severe financial strain, and about 50% of each group reported poor mental health. We estimate that there were 70,000 people [50,000-90,000] recently skipping meals where their income fell but they were ineligible for benefits

Many people in these groups had strong feelings about the fairness of being ineligible for benefits (if they thought they were ineligible). Among those who may have been financially struggling, the majority of those ineligible solely due to their migration status felt it was unfair, as did around half of those ineligible solely due to savings or partner earnings, or who had experienced an income shock and were ineligible for benefits.

Unsuccessful UC/JSA/ESA claimants

We also estimate that 290,000 people unsuccessfully tried to claim UC, JSA or ESA during the start of the COVID-19 pandemic (and a further 350,000 people considered making a claim without beginning an application). The largest group of unsuccessful claimants are those who applied for benefits but were rejected because they did not meet the eligibility criteria (230,000 people). 

In the absence of benefit income and often facing sharp income drops, unsuccessful claimants used several different ways of getting by financially: most commonly using savings, relying on friends/family, or borrowing from a bank/credit card. Yet even so, many were struggling financially. Nearly half (46.9%) reported severe financial strain.  Some (15.2%) had been hungry because they had skipped a meal in the previous two weeks, equivalent to 45,000 people. Unsuccessful claimants also had much higher levels of mental ill-health than the general population (excluding claimants).

The full report is available here (the data and replication file are available via the Open Science Foundation).

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