<ETA:> There will only ever be power to the lower element during the Off-Peak times. It's not just that you are checking for power at the wrong time of day?
The 'Boost' function will supply power to the upper element only. (When you select the Boost function during the day.)
Anyways, I'd be inclined to try to replace like-for-like if it comes to that.
That way, you can leave the existing backing plate in place.
I've looked at the installation manual for that timeswitch, and as you say, only one element can be active at a time.
So if you are seeing power on the upper element, there will not be power to the lower element.
http://horstmann.securemeters.com/files/9114/7261/7065/Electronic_7_installation_for_web.pdfRefer to P2 of the manual.
The schematic shows that power is sent out terminal 5 to the lower element during off-peak hours.
Outwith these hours, the power is directed through the Boost function relay to the Upper element via terminal 4.
(It's not clear whether during off-peak hours the upper element also gets an occasional cycle: that's a software thing in the timer, it's possible it does.)
With the timer removed from the back-plate, you should be able to test the wiring/thermostat/element from the back plate.
With the tank cold, ( thermostats calling for heat ), you should be able to 'see' the elements with an ohm-meter.
Measuring between terminals 3 and 4 should show the 20 ohms of the Upper (Boost) element.
Measuring between terminals 3 and 5 should show the 20 ohms of the Lower (Off-Peak) element.
If you can 'see' the 20 ohms here, then the wiring, thermostats and elements are OK, and it's possible the timeswitch is faulty.
If you can't see the 20 ohms of the lower element, then there's a problem with the wiring/thermostat/element that needs diagnosing.