Welfare reform: annual report 2019

The seventh in a series of reports that examines the impacts of UK Government welfare reforms on people in Scotland focusses on post-2015 reforms introduced by the UK Government, particularly the effects of the benefit freeze, two-child limit and Universal Credit work allowance reforms.

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1 Joseph Rowntree Foundation (2019), End the benefit freeze to stop people being swept into poverty

2 DWP (2019), Amber Rudd sets out fresh approach to Universal Credit

3 HM Treasury (2018), Budget 2018: documents

4 DWP (2019), Changes to benefits for mixed age couples.

5 House of Commons Work and Pensions Committee (2019), The benefit cap

6 DWP (2019), Stat-Xplore

7 The Scottish Government (2018), Annual Report on Welfare Reform

8 These were the most up-to-date data available at the time of report preparation. The figures presented here differ slightly from those presented in Government Expenditure and Revenue Scotland 2017/18, which used the most up-to-date expenditure data available at the time of its publication in August 2018. Figures are rounded to the nearest £100 million, which means that totals may not correspond to the sum of their individual components.

9 In Figure 1, “Supporting low income families” represents Scottish Government spending on Discretionary Housing Payments, the Scottish Welfare Fund, Fairer Scotland and Council Tax Reduction.

10 More information on which benefits have been devolved to Scottish Government control is available from Scottish Government (2017), Responsibility for benefits.

11 The benefit freeze was announced in the Summer 2015 UK Budget, to be implemented for four years between 2016/17 and 2019/20.

12 CPI refers to the Consumer Price Index, which is a measurement of inflation used to assess changes in price levels over time of the goods most commonly purchased by households.

13 Office for National Statistics (2019), Inflation and Prices Indices

14 Resolution Foundation (2019), The Living Standards Outlook 2019

15 Joseph Rowntree Foundation (2019), End the benefit freeze to stop people being swept into poverty

16 Household income is adjusted to take into account the size and composition of the household.

17 The poorest households are particularly exposed to cuts to social security spending. This is because benefit income, and particularly means-tested benefit income, represent a larger proportion of their total household income. Therefore when social security spending falls, it has a larger impact on poorer households than others.

18 Office for National Statistics (2019), Average household income, UK: Financial year ending 2018

19 HM Treasury, (2018), Budget 2018: Documents

20 The amount of UC entitlement lost for each £1 of additional net earnings is known as the taper rate.

21 OBR (2018), Economic and Fiscal Outlook, p. 243

22 HM Treasury (2016), Autumn Statement 2016: Documents

23 House of Commons Library (2019), Benefits Uprating 2019

24 HM Treasury, (2018), Budget 2018: documents

25 HM Treasury, (2018), Budget 2018: documents estimates that these policies will cost between £170 million and £240 million each year between 2020/21 and 2023/24, across the UK.

26 Surplus Earnings and the Minimum Income Floor are two complex UC rules. The Scottish Government’s 2018 Welfare Reform Report provides a simple explanation of how these two rules function.

27 DWP (2019), Changes to benefits for mixed age couples

28 UK Parliament (2019), Pension Credit: Written question

29 Managed migration refers to the movement of existing legacy benefit claimants off of those benefits and on to UC. Natural migration, which refers to people making new means-tested benefits claims being directed to claim UC instead of legacy benefits, is already underway across Scotland.

30 Office for Budget Responsibility (2019), Economic and Fiscal Outlook, p. 102

31 Further information on the full criteria is available at DWP (2019), Families with more than 2 children: claiming benefits.

32 DWP (2019), Amber Rudd sets out fresh approach to Universal Credit

33 This figure assumes that the Scottish share of this 15,000 families matches the Scottish share of UK families claiming Child Tax Credits for three or more children, which is 6%. This data is taken from the most recent geographical statistics published by HMRC on Tax Credits. The data is available from HMRC (2018), Personal tax credits: finalised award statistics – geographical statistics 2016 to 2017.

34 HM Revenue & Customs and Department for Work and Pensions (2019), Child Tax Credit and Universal Credit claimants: statistics related to the policy to provide support for a maximum of 2 children

35 This refers to a variety of situations where children live long-term with friends or family and would otherwise be at risk of entering the care system. Alternatively, this definition is also used in situations where a child under 16 who lives with their parents has a child of their own. Further information is available at HM Revenue & Customs (2018), Child Tax Credit: support for a maximum of 2 children.

36 DWP (2019), Stat-Xplore

37 House of Commons Work and Pensions Committee (2019), The benefit cap

38 Policy in Practice (2018), Benefit Cap: Policy in Practice’s evidence to the Work and Pensions Select Committee

39 House of Commons Work and Pensions Committee (2019), The benefit cap

40 Further information on Discretionary Housing Payments are available from Discretionary Housing Payments in Scotland (2018) and Social Security: Housing cost support (2018).


Email: Jamie.Hume@gov.scot

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