“The foreigners being paid £2 billion in benefits a year including 371,000 on the dole."

Daily Mail, 20 January 2012

"Overall, non-UK nationals claim £2.1billion in benefits every year."

The Sun, 20 January 2012

Last week the Government released data on the nationality of benefit claimants for the first time, prompting a series of headlines in the papers on the number of 'foreigners' supported by welfare payments, and the cost of this to the taxpayer.

But is £2 billion being paid to 371,000 foreigners, as the papers claimed, or is there more to the data than meets the eye?

Analysis

The 371,000 figure itself is not difficult to track down, coming as it does directly from the Department for Work and Pensions 'ad hoc analysis'. This states that:

"As at February 2011, over five and a half million people were claiming DWP working age benefits. Of these 371 thousand (6.4 per cent) are estimated to have been non-UK nationals when they first registered for a NINo [National Insurance Number]."

However describing these people as 'foreigners', as many papers chose to, is problematic. The DWP study explicity notes (in red ink):

"These statistics do not provide a measure of non-UK nationals currently claiming benefits based on their current nationality. The statistics do provide an estimate of the number of people currently claiming benefit who, when they first registered for a NINo (that is, first entered the labour market), were non-UK nationals."

In fact, the DWP itself notes that over half of those arriving from outside Europe and registering as a foreign national for a NiNo went on to claim British citizenship. Officially at least, this group cannot be described as 'foreigners':

"Initial results from a sample exercise to match non-EEA claimants who were recorded as foreign nationals at the time they first registered for a NINo suggests that more than half (54 per cent) will have obtained British citizenship subsequently."

Costs

The £2 billion figure is more intriguing. According to the Mail, it was arrived at by calculating 6 per cent of the "£35 billion [that] was paid to 5.5 million people in out-of-work benefits."

However the Mail seems to have a more expansive definition of what constitutes an 'out-of-work benefit' than that used by the DWP in its research.

The DWP defines an 'out-of-work benefit' as "Incapacity Benefit, Income Support, Employment and Support Allowance (income related or contributory) or Jobseeker’s Allowance (income based or contributory)."

Looking at the DWP's own benefit expenditure tables, we can see that the Department spent approximately £20.1 billion in these schemes. Adding in Carers' Allowance and Severe Disability Allowance, which are sometimes also termed an 'out-of work benefit' brings the total handed out to £22.6 billion.

However to get the total to £35 billion, the Mail has also included Bereavement Allowance and Disability Living Allowance (which gives a total outlay of £35.1 billion). It is wrong to class Disability Living Allowance as an 'out-of-work benefit', not least because those claiming it can be in employment.

If we instead work from a total cost of out-of-work benefits of £22.6 billion, the six per cent share accounted for by non-UK nationals would amount to £1.36 billion.

This itself may be a red herring however, as the DWP research focuses not on 'out-of-work benefits', but rather working-age benefits (i.e. all those paid to recipients between the ages of 16 and 60/65). According to the DWP's expenditure tables, some £52.2 billion is directed at this group, of which six per cent is £3.1 billion.

This calculation does assume that non-UK nationals are claiming the same sums in benefits, on average, as UK nationals, which of course may not be the case.

Conclusion

While the numbers of non-UK nationals (as recorded at the time of the NiNo application) was accurately reported by both the Mail and the Sun, the conclusions drawn by both papers might stretch beyond what can be fully substantiated by the data.

Firstly both papers claim that these claimants cost a total of £2.1 billion, however this seems to have been calculated in a rather round about way - in the Mail's case by misattributing DLA as an 'out-of-work benefit' - and a more accurate estimation could be £3.1 billion per annum. However given the limitations of the data, we cannot know this for sure.

Furthermore, terming these claimants 'foreigners' is problematic, as a significant proportion have gone on to take UK citizenship.