Social Security (Amendment) (Scotland) Bill: business and regulatory impact assessment

Purpose and Intended Effect

Background and Objective

The Social Security (Scotland) Act 2018^[1] (“the 2018 Act”) set out the overarching legislative framework for the administration of social security in Scotland, took powers for Scottish Ministers to deliver social security assistance and made provisions for operational functions such as managing overpayments, error and appeals.

The Scottish Parliament subsequently passed the Social Security Administration and Tribunal Membership (Scotland) Act 2020^[2], which included provision for appointees, provisions for suspension of entitlement, and extended the provisions for offences in the 2018 Act to forms of top-up assistance under section 79 of the 2018 Act.

This Bill introduces provisions aimed at effecting the continuous improvement of the social security system across a range of topics, in line with the Scottish social security principles laid out in Part 1 of the 2018 Act.^[3] These core principles, endorsed unanimously by the Scottish Parliament, deliberately correspond to some of the fundamental aspects of the right to social security, as set out in key human rights instruments such as the International Covenant on Economic, Social and Cultural Rights,^[4] the Universal Declaration of Human Rights,^[5] and the European Social Charter.^[6]

In particular, the principles which connect most closely to the provisions included within the Bill state that –

“opportunities are to be sought to continuously improve the Scottish social security system in ways which –

(i) put the needs of those who require assistance first, and

(ii) advance equality and non-discrimination”

and

“the Scottish social security system is to be efficient and deliver value for money”

The majority of provisions included within the Bill are designed to create efficiencies and enhance the administration of the Scottish social security system, with a focus on measures to improve client experience and to deliver value for money.

Further information about the background and the policy intention of the Bill is set out in the Policy Memorandum which accompanies the Bill. An overview of the provisions included in the Bill and their specific policy aims are set out below.

Taking a regulation-making power for childhood assistance

New enabling powers are provided within the Bill, allowing the Scottish Ministers to make regulations for childhood assistance, which will help towards meeting some of the costs associated with having a child in the family. Scottish Ministers intend to use the new powers for childhood assistance in due course as a new legislative footing for Scottish Child Payment (SCP) to allow better alignment of Social Security Scotland benefits.

SCP is currently delivered under section 79 of the 2018 Act^[7] as a ‘top-up’ where an individual is receiving a qualifying UK Government benefit.^[8] Placing the payment on a new legislative footing will offer the opportunity for greater alignment across the five family payments (including the Best Start Grants and Best Start Foods) and will afford flexibility in the way the payment is delivered in the future.

Financial support for people with care experience

A provision will be included in the Bill allowing Scottish Ministers to create, by way of regulations, financial support for people with care experience. The current intention is that these powers will be used initially for a payment called the Care Leaver Payment (CLP).

The CLP will fulfil the commitment made in the Promise Implementation Plan published in March 2022 to ‘provide some additional financial security for young people with care experience and will help reduce some of the financial barriers that young people face whilst moving on from care and into adulthood and more independent living’.

Amendments to Coronavirus (COVID-19) measures introduced in 2020

In 2020, due to the coronavirus (COVID-19) pandemic, sections 52A and 52B were amended into the 2018 Act by the Coronavirus (Scotland) Act 2020.

Section 52A means requests for re-determinations must be considered valid beyond the maximum period of one year prescribed by the 2018 Act, where the reason for delay was related to COVID-19. Section 52A also allows for appeals to be brought beyond the maximum prescribed period of one year, where the Tribunal gives permission on the basis of being satisfied that the reason for the delay was related to COVID-19. Section 52B allows a late application to be treated as being made within the prescribed period for a given benefit under Chapter 2 of the 2018 Act, where the reason for delay was related to COVID-19.

The provisions in the Bill will give Social Security Scotland discretion to accept late requests for re-determination beyond the one-year prescribed period on the basis of ‘exceptional circumstances’, rather than only COVID-19. The provisions in the Bill will repeal section 52A of the 2018 Act and allow appeals to be brought, with the permission of the Tribunal, beyond the one-year prescribed period on the basis of ‘exceptional circumstances’, rather than only COVID-19. Provisions in the Bill will remove section 52B from the 2018 Act and revert application periods to existing pre-COVID deadlines.

Withdrawing a request for re-determination

Under the 2018 Act, where a determination of entitlement to assistance is made, an individual has a right to a re-determination. If a client asks for a re-determination, the Scottish Ministers are under a statutory duty to make a new determination. A client cannot subsequently withdraw their request for re-determination, even if their circumstances have changed since making their request, or if they have otherwise changed their mind.

The Bill includes provision enabling clients to withdraw a re-determination request if they no longer wish to challenge the decision. This policy builds on the person-centred, rights-based approach already adopted for challenge rights in line with the Scottish social security principles and the Social Security Charter (‘the Charter’).^[9]

Completing re-determinations beyond the period allowed

Where a re-determination is not completed by the Scottish Ministers in the timescales set out in the relevant regulations, the re-determination becomes out-of-time and the client is notified that they have a right to appeal to the First-tier Tribunal (Social Security Chamber) without waiting for the re-determination to be made. The Scottish Ministers are, at that point, no longer under a duty to make the re-determination. However, in practice, they continue to consider the re-determination request.

Provisions are included in the Bill so that the Scottish Ministers remain under the duty to make the re-determination beyond the period allowed, unless the client opts to exercise their right to appeal. This will offer legal clarity in terms of what happens in practice when a re-determination runs late.

Making a new determination of entitlement whilst there is an ongoing appeal

Under the 2018 Act, Scottish Ministers cannot make a new determination after a valid appeal has been brought, even if an error has been identified, or new evidence received, which shows that a client has been underpaid, or not received an award that they were entitled to. The appeal must continue unless it is withdrawn by the client.

In instances where the Scottish Ministers recognise that an individual should have received a higher, or more advantageous, award, the provisions in the Bill allow a new determination to be made after an appeal has been lodged and the appeal to stop as a result. The new determination can only be made if the client agreed, and will come with challenge rights.

Appeals to First-tier Tribunal against process decisions

The 2018 Act provides at section 61 that individuals can appeal to the First-tier Tribunal for Scotland against certain decisions made by the Scottish Ministers on the process of applying for benefits, or the process of challenging determinations.

The provisions in the Bill set out the powers of the Tribunal to uphold or set aside decisions in process appeals, and the effect of a Tribunal decision in a process appeal. The Bill also sets out further circumstances in which a process appeal may be raised, to include the new types of process introduced by the Bill.

Overpayment liability and challenge rights

Under the 2018 Act, a client has a statutory liability to repay any overpayment made in error, except where they did not cause or contribute to that error, and if it was the sort of error a person could not reasonably be expected to have noticed.

The provisions in the Bill set out that liability extends to clients who have a representative acting on their behalf, except where the representative uses the assistance for a purpose which is a breach of their duties or responsibilities, in which case the representative will be personally liable.

Currently, where Social Security Scotland determines that an overpayment has occurred, it makes a new determination on a client’s entitlement to benefit. Although this new determination will bring re-determination and appeal rights if the client wants to challenge the decision, there is not any formal right to challenge the decision that an individual is liable to repay the overpayment.

The provisions in the Bill also introduce a right to a review (followed by a right to appeal to the First-tier Tribunal for Scotland (Social Security Chamber)) against a finding of liability for an overpayment. The further review and appeal provisions in part 6 of the Tribunals (Scotland) Act 2014 will also be available.

Recognising Appointments made by a Minister of the Crown

Where a person lacks capacity to manage their own financial affairs, the Department for Work and Pensions (DWP) and Scottish Ministers both have provisions that allow them to appoint a person or organisation, known as an appointee, to act on that person’s behalf.

Due to differences in the law and the processes that govern appointments in Scotland and the rest of the United Kingdom, a DWP appointee – which is an appointment made by a Minister of the Crown – cannot automatically be treated as equivalent to an appointee under the 2018 Act.

The Bill will introduce powers for Scottish Ministers to make provision in regulations prescribing circumstances in which a DWP appointee may be treated as though they had been appointed by Scottish Ministers to act on a client’s behalf, pending an assessment by Social Security Scotland.

Liability of appointees

Currently, there is no provision within the 2018 Act with the effect that an appointee will be liable to account to the individual for any mismanagement of the individual’s property (either in relation to children or adults). There are provisions respectively, in terms of the Children (Scotland) Act 1995 and the Adults with Incapacity (Scotland) Act 2000, which make other types of representatives liable to the individual for mismanagement of their property.

The Bill provides that an appointee will be liable to account to the individual for whom they were appointed, for their use of the individual’s funds outwith their authority or power, or after having received intimation of the termination or suspension of their authority or power to intervene. They are to be liable to repay the funds to the account of the individual. No liability will be incurred where the appointee acted reasonably and in good faith in their use of the individual’s funds.

Information for audit of the social security system

Social Security Scotland need to produce effective measurements and estimates of the extent of client error, official error, and fraud as assurance that the social security system is efficient and delivering value for money in line with the Scottish social security principles.^[10]

Currently Scottish Ministers can only request that people provide information for the specific purpose of determining an individual’s entitlement to social security assistance. Provisions in the Bill will give Scottish Ministers powers to require individuals to provide information when reasonably requested to do so, in order to review their entitlement for the purposes of audit. Safeguards will be built in to ensure that where a person has good reason they might be exempted from the process.

Recovering Scottish social security assistance from awards of compensation

A person affected by accident, injury, or disease due to the fault of a third party may be entitled to compensation. Depending on the nature of their accident, injury, or disease they may also be entitled to social security assistance. The Scottish Government believes that a third party’s legal obligation to fully compensate those they have harmed should not be subsidised by Scotland’s social security system.

The provisions in the Bill allow the Scottish Government to recover relevant forms of Scottish assistance from awards of compensation, avoiding the risk of a person being ‘doubly compensated’ for the same incident. The policy on compensation recovery is consistent with the responsibilities in the Scottish Public Finance Manual^[11], and aligns with the Scottish social security principle that the Scottish social security system is to be efficient and deliver value for money.^[12]

Changes to the remit and status of the Scottish Commission on Social Security

The Scottish Commission on Social Security (SCoSS) reviews certain social security policies, by way of consideration of draft regulations, and provides the Government and the Scottish Parliament with scrutiny reports on each piece of legislation it reviews.

The provisions in the Bill expand the types of regulations that SCoSS is able to review, and replace the requirement for SCoSS to prepare accounts for external audit, with a requirement to submit an annual report on their work to Scottish Ministers. The Scottish Ministers will then share this report with the Scottish Parliament.

The Bill also removes the status of SCoSS as a body corporate. SCoSS will continue to be recognised as an advisory non-departmental public body which better reflects how it operates in practice.

Rationale for Government intervention

The principles which underpin the Scottish Social Security system are set out in Part 1 of the 2018 Act^[13]. These core principles, endorsed unanimously by the Scottish Parliament, deliberately correspond to some of the fundamental aspects of the right to social security, as set out in key human rights instruments such as the International Covenant on Economic, Social and Cultural Rights,^[14] the Universal Declaration of Human Rights,^[15] and the European Social Charter.^[16]

In particular, the principles state that –

“Opportunities are to be sought to continuously improve the Scottish social security system in ways which –

(i) put the needs of those who require assistance first, and

(ii) advance equality and non-discrimination”

and

“the Scottish social security system is to be efficient and deliver value for money”

Social Security Scotland's Charter^[17], co-designed with people with lived experience of the social security system in Scotland, translates these principles into more concrete actions. The Charter commitments include undertaking to listen, learn and improve, to embed the social security principles and Charter in the policymaking process, and to allocate resources fairly and efficiently.

The Scottish Government recognises the importance of continuously seeking to realise those commitments. The Bill aims to make changes to the 2018 Act with the benefit of experience of delivering services through Social Security Scotland.

The Scottish Government considers that social security is a human right^[18] and a shared investment to help tackle poverty and build a fairer, more equal society. The National Performance Framework^[19] was created to explain the Scottish Government’s aims for Scotland, the values that guide our approach and the national outcomes we are committed to achieving.

The majority of the proposals in the Bill are cross-cutting in nature and promote a person-centred, human rights-based approach to social security. The policy intention is to create efficiencies, remove barriers and empower people interacting with Social Security Scotland.

The Bill will contribute positively to advance the national outcomes of:

• Communities: We live in communities that are inclusive, empowered, resilient and safe.
• Human Rights: We respect, protect and fulfil human rights and live free from discrimination.
• Poverty: We tackle poverty by sharing opportunities, wealth and power more equally.

The Scottish Government published a strategy document titled “Equality, opportunity, community: New leadership – A fresh start” on 18 April 2023 which set out the First Minister’s vision for Scotland and the outcomes the government aims to achieve by 2026.^[20]

The Bill will contribute positively to two of the three indicators set out: Equality and Community. Firstly, Equality, through tackling poverty. Social Security Scotland makes payments which contribute to reducing inequality and which help protect people from the harms which flow from living in poverty.

The second objective, Community, will be advanced through this Bill by prioritising public services in a way which is person-centred, with a focus on tackling inequalities and ensuring that people are empowered to access and challenge their social security entitlement.