The take-up of Income Support and passported benefits for pensioners in the UK: some issues

In seeking to understand the factors that lead to non-take-up of means-tested benefits it is important to identify the potential gains from claiming and the possible barriers to making a claim. Generally, the benefit of claiming is considered to be the cash entitlement. The barriers are lack of information, stigma and other claim costs. In any practical exercise based on survey data the picture is blurred " and may be distorted " by measurement error. Hancock and Barker (2003) examine these issues in relation to Income Support (IS) for British pensioners and Pudney (2001) investigates the possible impact of measurement error on estimates of the take-up of this benefit. However, as well as the cash income offered by IS, there are also benefits in-kind that may be received by virtue of being in receipt of this benefit. One example is free dental treatment; another is funeral expenses paid through the Social Fund. Such "passported benefits" may affect all three of the aspects of take-up modelling mentioned above. First, the prospect of being entitled to these additional benefits may make claiming IS more worthwhile: the costs of claiming are more likely to be offset by the gains from a successful claim. Secondly however, there may be additional stigma attached to the receipt of in-kind benefits, thus lowering the likelihood of claiming. Finally, data limitations regarding receipt and valuation of the benefits may introduce additional forms of measurement error.