Are only one in eight Housing Benefit claimants unemployed?

"Cameron is repeating the housing benefit myth... The statistic Cameron ignores: only one in eight claimants is unemployed."

New Statesman, 25 June 2012

"Only one in eight people drawing [Housing Benefit] is out of work; the rest are low earners."

The Guardian, 26 June 2012

The Mail on Sunday this week gained an exclusive interview with the Prime Minister David Cameron, in which it was suggested that Housing Benefit for the under-25s could be axed, a move which the PM claims could save the Government £2 billion.

The interview certainly created a great deal of interest in the Government's ongoing plans for welfare reform. However the New Statesman and the Guardian pointed out that only one in eight people claiming Housing Benefit is actually out of work. Is this right?

Analysis

Full Fact published a video yesterday explaining the context behind Housing Benefit figures. In it we featured statistics from the Department for Work and Pensions (DWP) on the employment status of Housing Benefit claimants.

However the figures were less than conclusive. To find out why we only need to look at a parliamentary answer from Pensions Minister Steve Webb, who said in response to a question asking for such statistics:

"The economic status of all housing benefit/council tax benefit (HB/CTB) recipients is not available. Information is only available for those HB/CTB recipients whose claim is not passported."

'Not passported' refers to 'benefit units' (individuals or couples claiming the benefit) that do not receive either Income Support (IS), Jobseeker's Allowance (JSA), Employment and Support Allowance (ESA) or Pension Credit. Those which do receive these benefits are automatically 'passported' onto full Housing Benefit. 

So why is information only available for those that don't receive these benefits? A statistical note from parliament answers:

"This is because the [employment] status is determined by information on income from employment. This specific information is not mandatory to collect for passported claimants because their passported benefit status automatically determines full award of HB/CTB."

Nevertheless, the data from the DWP does give us something to go by:

Looking at the chart above gives us some clues as to where the claim might be from. Just under 13 per cent - or one in eight - of Housing Benefit claimants are also receiving Jobseeker's Allowance (JSA). This is a key unemployment-related benefit used by the Office for National Statistics as an out-of-work indicator.

However this isn't the whole story. Income Support, for instance, is available to people of working age who work less than 16 hours a week. Income Support goes to those who are not required to sign on as available for work. This is partly why the DWP define this, JSA and ESA as the 'key out of work benefits'.

This means that, while it is not entirely clear-cut, not all of the other passported claimants will necessarily be in work. The Department admits that "a small proportion of the passported cases will be in part-time employment", but we can reasonably expect most others to be out of work altogether.

Whether or not the 'other non-passported' claimants are out of work is also unclear. Non-passported claimants are only logged as 'employed' if their local authority has income data from them, so those in the 'other non-passported' category lack this. Again, it is reasonable to assume that most of these will genuinely be out of work, but the data isn't explicit about this.

Conclusion

What is most noticeable about the issue is that accurate data on the employment status of Housing Benefit claimants is "not available", as the Government admits. While it is true that only around one in eight claimants receive Jobseeker's Allowance, this shouldn't be treated as a proxy for unemployment here.

What we can confirm from the DWP's statistics is that at least 18 per cent of Housing Benefit claimants are in employment, although this could be on either a full- or part-time basis. The DWP also concedes that, of the other claimants, some of them could well be working part-time too.

So both claims are problematic because the data needed to stand them up simply isn't available - and what is available suggests their 'one in eight' figure is likely to be a significant underestimation of the proportion of benefit claimants actually out of work.

Clarification

An eagle-eyed Full Fact reader has pointed out that we neglected to mention details behind the passported benefits. The passported benefits being referred to were income-based Jobseeker's Allowance (as opposed to contributions-based JSA) and income-based Employment and Support Allowance. In addition, Pension Credit must be 'Guaranteed Credit' in order to be passported to Housing Benefit.