Windrush victims will have an additional two years to apply for compensation for their losses after the Home Office bowed to pressure to extend the deadline by two years.

However, concern remains about both a lack of legal support for people applying and of outreach work to tell people they are eligible, after new figures showed just over 1,000 individuals had applied out of more than 8,000 whose status was confirmed by a special Windrush taskforce.

The department announced on Thursday that the deadline to apply for the scheme – which was announced last year to reimburse Commonwealth nationals who had been in Britain for decades but had been refused their basic rights in the country – would be pushed back from April 2021 to April 2023 to give people more time to make a claim.

Ministers also said they would amend the mitigation policy – the criteria by which financial settlements are made – to take a wider range of circumstances into account so applicants would no longer only be expected to show they took immediate steps to resolve their immigration status.

Up until the 31 December, 1,108 claims had been received, with 36 payments made so far totalling £62,198, according to figures released by the department on Thursday. It said these payments were “interim”, meaning claimants may receive further awards later.

Lawyers and campaigners welcomed the changes, but warned that it would be of little impact if the Home Office did not address a shortage of legal help for people going through the application process, and the absence of any national media campaign to inform people of the scheme.

They said the fact that 1,008 people had applied – around 13 per cent of those who have been provided with documentation by the Windrush taskforce confirming their status – suggested that many were not aware of the scheme or did not know how to go about applying.

The Independent reported last month that there was widespread concern about a lack of state-funded support to help people apply to the scheme, which had in some cases led to people submitting poor quality claims that may be rejected even though they were eligible or causing people not to apply at all because the process is simply too complex.

In one case Paul Nichols, a man who was told the UK government had no record of him despite having spent nearly a decade serving in the British army, said he had not yet applied for reparations under the compensation scheme due to difficulties accessing proper legal support to do so.

Related video: Diane Abbott voices 'grave' concerns on Windrush compensation scheme (Paul Nichols)

Since April 2019, Citizens Advice branches across the country have been providing a service funded by the Home Office to help those who are applying to the compensation scheme to fill in forms and provide support over the phone and in person, but lawyers said this was “far from” the help that was required.

Responding to the government’s announcement, immigration lawyer Jacqueline McKenzie said: “Extending the time that people have to make applications is the least that can be done because a very large cohort of people are really struggling to make applications even with the help of the Citizen’s Advice service.

“Further, we're still seeing people at surgeries who are yet to apply for immigration status documents, there are people who've applied and not had a result and there are still thousands of people who have not come forward.”

Ms McKenzie said she was “pleased” that the mitigation policy was being re-examined, but expressed disappointment in the fact that no support had been provided to community and legal organisations who were working with Windrush victims and “spending tens of hours with each claimant to make viable claims”.

Diane Abbott voices 'grave' concerns on Windrush compensation scheme

She added: “The work to be done is not simply filling in a form. It requires a judgment about whether there is a claim, collating the evidence to substantiate the claim, taking witness statements to explain the impact on life and livelihood, attending to related welfare issues such as homelessness, debt, employment."

The immigration lawyer said the Home Office must offer the Windrush community the same level of support that has been offered to groups helping vulnerable EU citizens to apply for post-Brexit immigration status – which amounts to £9m – and that until it did so it was "simply paying lip service to the notion that their trying to right the wrongs".

Campaigner Patrick Vernon echoed her concerns, and called for the scheme to be run by another government department or agency in order to ensure there was no “conflict of interest” – as well as more efforts to inform Windrush victims both in Britain and abroad about their right to apply for compensation.

“The Home Office cannot be doing this while at the same time chartering deportation flights to Jamaica and presiding over the hostile environment. There would be more confidence in the scheme and more applications if it were administered by another department or arms length body,” he added.

Labour's shadow immigration minister Bell Ribeiro-Addy meanwhile said: “By the government's own admission it is continuing to fail the Windrush victims. The compensation is paltry and not well publicised. Others are frightened to claim because of fear of the 'hostile environment'. The government will not end this scandal unless it completely changes course.”

Martin Forde QC, who devised the compensation scheme, said the system was designed so that it could be updated and improved without delay in response to any difficulties of implementation to ensure it was “fair, accessible and generous”.

He added: “By taking a more generous approach to mitigation evidence and continuing the support available for those wanting to claim, the Scheme will now be easier to navigate, more accessible than ever and will provide fair compensation to all those affected.".