The recipient of one of the first Windrush compensation offers has said she plans to turn it down, describing the government’s offer as insultingly low because it covers only a year’s loss of earnings even though she was out of work for a decade.

Glenda Caesar, 58, came to Britain legally as a three-month-old child in 1961 from Dominica, and has lived in the UK ever since. She was sacked from her job as an administrator in a GP’s practice in 2009 and was subsequently denied unemployment benefits.

The Home Office has calculated that she should receive £22,264 in compensation to cover loss of earnings, impact on family life and the distress caused by being wrongly detained on one occasion at Gatwick airport for a few hours.

Caesar got heavily into debt as a result of the Home Office’s refusal to believe she was living in the UK legally, and owes £10,000 in rent arrears. Caesar’s daughter, who is deaf, shared her disability benefits with her mother to help her buy food.

“I feel insulted, as if they are throwing crumbs at me,” she said. “I wasn’t able to work or get benefits for 10 years. I was selling old trainers on eBay to survive. I’m not looking for millions but this is ridiculous. I was really happy in my job and if this hadn’t happened I would still be in it now.”

Caesar submitted the compensation application in April, having filled in the form herself. Critics of the compensation scheme say it is too complicated for applicants to fill out without assistance; there is a 45-page guidance booklet to accompany the 18-page form. The Home Office has contracted some Citizens Advice offices to provide support but has not provided money for legal advice.

Holly Stow, a paralegal from the North Kensington Law Centre, which received a charitable grant to help applicants complete the form, is working with 12 Windrush claimants, of whom Caesar is the first to receive an offer.

She said she would help Caesar to challenge the offer and to gather extra evidence to substantiate her claim. “She has been unemployed for 10 years – that’s under £2,000 a year in compensation, when she was earning much more than that. This has had a profound impact on her life, at one point she was considering taking her own life, but this doesn’t even cover her employment losses,” she said.

Caesar has been offered £7,000 for the impact that the Home Office’s treatment had on her life.

The loss of earnings part of the compensation payment is capped in the small print of the scheme at 12 months, but Caesar wants to challenge that.

Shortly after the compensation scheme was announced she met Sajid Javid, who was then home secretary, in the Houses of Parliament. “We were told by Javid that there would be no cap. The government openly admitted it was their fault,” she said. “I am determined to fight. If I accept this then everyone will be offered small amounts.”

It is 20 months since the government apologised for wrongly classifying thousands of Commonwealth-born residents as illegal immigrants despite the fact they had travelled legally to the UK as children in the 1950s and 60s.

Many lost their jobs and were denied unemployment benefits, and some were made homeless, detained or deported to countries they had left as children.

The compensation scheme was announced in April and could pay out between £200m and £570m. The Home Office has not released figures about how many people have applied.

Jeremy Bloom, a lawyer with Duncan Lewis, said he had attempted to get exceptional legal aid funding to help Vernon Vanriel, a former boxer, and a number of other people to apply for compensation, but this was rejected last week.

Vanriel was stuck in Jamaica for 13 years, prevented from returning to the UK after a visit. He had lived in London for 43 years. The Legal Aid Agency ruled that no legal assistance was required to fill in the form.

A Home Office spokesperson said: “We are determined to right the wrongs experienced by the Windrush generation. The Windrush compensation scheme has been carefully designed with independent oversight to ensure that we deliver on that commitment and to make sure those who are eligible are compensated.”

The Home Office said there was independent advice available to anyone who needed help, and two levels of review available for anyone unhappy with their offer.

Bloom said many of those affected did not want to turn to the Home Office for advice. “It is not reasonable to expect the Home Office to support people to make a claim when it is the Home Office that is going to be paying out and deciding the level of the claim,” he said.