London Green Party Chair, Noel Lynch, is quoted in The Mail on Sunday (23/7/2006) as saying "It is an absolute scandal"
– Tax Credit take-up as low as 13%- over 1 million low earners losing out
These were released in March but seem to have been completely missed in the blizzard of comment surrounding the other problems besetting tax credits- fraud and error.
There are two statistics on take-up – by caseload (proportion of people entitled who are claiming) and expenditure (proportion of benefit payable being paid out). (Generally take-up by expenditure will be higher as the people who should be paid most are more likely to claim.)
There are many tables in the attached document – they generally show fairly ok levels of take-up: Child Tax Credit (CTC) is about 80% and 90% (caseload/ expenditure) and Working Tax Credit (WTC) is about 60% and 80% (caseload/ expenditure).
What we want to draw attention to is the take-up of WTC by families with no children. The relevant data is in Table 10 (page 12 of 17 in the pdf above).
This table shows that:
– Take-up for families without children is 13% and 17% (caseload / expenditure).
These are some of the most abysmally low take-up rates for a means-tested benefit that have ever have been recorded anywhere (we couldn’t find anythingclose to this internationally). Many more than 4 out of 5 people entitled are not claiming their benefit. These people are earning between £5kpa and £10kpa – they are people who need this benefit the most.
– Over 1 million people are in this situation (ie earning between £5kpa and £10kpa and not claiming their entitlement).
– They are losing out on an estimated (by HMRC!) £1.5bn each year – that’s an average of £1,500pa or about £30 per week. It’s an absolute scandal. There are almost as many people in this situation who are not claiming as there are people affected by HMRC errors (which has been the main area covered so far).
Noel Lynch, chair of London Green Party who has done the research on this, said:
"The only defence for Gordon Brown’s expensive tax credit debacle was that it was a way of targeting benefits to those who most need it. These figuresshow that as well as the administrative problems and fraud besetting tax credits the scheme has been useless at targeting benefits to those most in need as well. The government needs to go back to the drawing board and add improving levels of take-up amongst the most needy to the long list of urgent problems with tax credits that need to be fixed."