Annex F: Draft Business and Regulatory Impact Assessment summary
Title of Proposal
Disability Assistance for Working Age People (Scotland) regulations
Purpose and intended effect
The Social Security (Scotland) Act 2018 (the 2018 Act) sets out the broad framework for the delivery of devolved social security in Scotland. On 1 April 2020, the Scottish Ministers took executive and legal competence for disability benefits, including Disability Living Allowance for Children, Attendance Allowance and Personal Independence Payment.
These benefits will continue to be delivered during a transition period by the Department for Work and Pensions under the terms of an Agency Agreement agreed with the Scottish Government to ensure the safe and secure devolution of disability benefits.
The Scottish Government intends to replace Disability Living Allowance for Children, Personal Independence Payment and Attendance Allowance with new forms of assistance under the 2018 Act. These new benefits will be delivered by Social Security Scotland on behalf of Scottish Ministers with determinations carrying a right of appeal to the First-Tier Tribunal for Scotland's Social Security Chamber.
The Scottish Government intends to launch disability assistance for new applicants first. This includes individuals who are not in receipt of a United Kingdom or Scottish Government disability benefit. Transfer of existing Department for Work and Pensions clients to Social Security Scotland will take place at a later point without clients needing to make a new application. Clients will be no worse off at the point of transfer, and Social Security Scotland will honour the client's award review date.
The Disability Assistance for Working Age People (Scotland) regulations sets out how we will deliver our replacement for Personal Independence Payment; Adult Disability Payment. This was formerly known as Disability Assistance for Working Age People. It will replace Personal Independence Payment in Scotland for people between the ages of 16 and state pension age.
The policy background to the regulations and further information about the specific provisions are fully described in this consultation document at Annex A and B.
This impact assessment is one of a package to accompany the regulations. The others are: Business and Regulatory Impact Assessment (BRIA); Equality Impact Assessment (EQIA); and the Fairer Scotland Duty Assessment.
Rationale for Government intervention
The assessment of the Disability Assistance for Working Age People (Scotland) regulations and Adult Disability Payment overall in relation to Business and Regulatory impact was undertaken using the five principles of Better Regulation, as follows:
Proportionate: The Scottish Government will look to identify and minimise any indirect impacts, for example administrative burdens, on local government, private businesses or third sector organisations as a result of the introduction of Adult Disability Payment.
The equivalent United Kingdom benefit, Personal Independence Payment, will reduce in caseload as Adult Disability Payment is delivered by the Scottish Government and cases are later transferred to Social Security Scotland. This will likely lead to a neutral impact in the longer term on the administrative burdens on other public agencies, private businesses and third sector organisations.
In the short term, there may be additional work for public agencies and some third sector organisations as they make arrangements for their staff to incorporate knowledge of the replacement benefit into their current systems. Social Security Scotland has committed to undertaking much of the administrative responsibility, as far as possible, on behalf of people accessing disability assistance, including Adult Disability Payment, and intends to create data sharing processes with relevant public bodies.
It is anticipated that this will reduce the burden of providing information to individuals that public agencies currently undertake when applying for disability benefits, by creating formal data sharing agreements and processes with one Agency, Social Security Scotland.
There is also expected to be a neutral impact on medical professionals as a result of our new definition of terminal illness. They will still be expected to use their clinical judgement to determine whether an individual has a terminal illness with the primary difference being that, instead of a DS1500 form, they will be required to fill out a Benefits Assistance Under Special Rules in Scotland (BASRiS) form as evidence. There may be some short-term effects as medical professionals adjust to using the BASRiS form and taking a different approach but, overall, this should not place additional burdens on medical staff.
Consistent: Adult Disability Payment builds on the Social Security (Scotland) Act 2018 framework of a new system that is underpinned by dignity, fairness and respect.
Adult Disability Payment will be delivered on an entitlement basis to eligible people. Decision-making will be person-centred and operational guidance for case managers within Social Security Scotland will be created in line with the rules within the regulations which will provide a framework for consistent decision making across all applications. This includes guidance provided to practitioners of Social Security Scotland which will be utilised to should a client be invited to attend a consultation.
Where possible the Disability Assistance for Working Age People regulations and the associated policies have been aligned with those for Child Disability Payment to provide a consistent approach for clients, and services who will support them, to make applications for disability assistance and navigate Scotland's social security system.
Accountable: All decisions made relating to an application for disability assistance will be provided to clients in a communication method that meets their needs. All information used, and rationale for the decision, will be included within this communication to ensure that clients are informed of how the decision relating to their application was assessed.
The Social Security Charter sets out, in plain and clear English, what people are entitled to expect from the Scottish social security system, including how they should be treated and how their application will be processed. Complaints regarding Social Security Scotland can be directed to the Scottish Public Services Ombudsman.
We will ensure that clients understand their right to have their decision re-determined by Social Security Scotland and to request an appeal to the First Tier Tribunal (FtT) if they are unsatisfied with the outcome of the re-determination. This includes their right to appeal directly to the FtT if Social Security Scotland is unable to complete the re-determination process before 56 days have elapsed.
Individuals will also be made aware of the existence of Short-Term Assistance (STA) which can be applied for during re-determinations and appeals on ongoing awards of Adult Disability Payment. This will help to ensure that individuals are not discouraged from challenging a decision they do not agree with or seeking administrative justice by having to manage, for a time, with reduced income.
Transparent: We will develop a communications strategy for each form of disability assistance, including Adult Disability Payment. This will aim to ensure that clients and their families or carers, the third sector, local government, education and health sectors and advice providers are aware of the benefit, know how to apply and understand the eligibility criteria. Where a decision is made that a client is not entitled to assistance, Social Security Scotland will provide a reason why, as set out in the Social Security (Scotland) Act 2018, to ensure that decisions are understood and that our processes are as transparent as possible.
We will publish guidance on Adult Disability Payment in a way that takes account of differing communication needs, so that entitlement is clearly understandable. Social Security Scotland will create a bank of Adult Disability Payment stakeholder resources and content in accessible formats that will be proactively supplied to relevant stakeholder organisations through the National Stakeholder Engagement team, for organisations to distribute to people in local communities. The languages we proactively translate materials into were selected through stakeholder consultation. These are: BSL, Farsi, Mandarin, Cantonese, Urdu, Gaelic, Polish, Arabic, braille and easy read formats.
Social Security Scotland will produce communication materials in other languages on request. Social Security Scotland communications will work with community radio and foreign language press to provide messaging on Adult Disability Payment to communities. In some circumstances printed marketing materials may not be the right way to engage with communities and where this is the case we will provide an engagement approach through work carried out by the National Stakeholder Engagement and Local Delivery functions.
We published the first Benefit Take-Up Strategy (October 2019) under the provision of the Social Security (Scotland) Act 2018. The strategy sets out Scottish Ministers' work supporting benefit take-up to date. It also introduces a series of new activities and initiatives aimed at increasing awareness of and access to Scottish benefits and supporting those who are eligible to apply.
These include new funding streams for benefit take-up and income maximisation, establishing a Take-up Stakeholder Reference Group to provide advice and support in the implementation of this strategy, developing a Take-up Stakeholder Toolkit, and two roundtable events to be held in 2020 which will be co-designed with important organisations to explore solutions to issues such as stigma, barriers to access, and the human rights-based approach.
We are also working to ensure that client consultations are as transparent as possible. This includes recording consultations as standard (with the client having the ability to opt out should they choose) so that a record of the conversation is kept. This recording can be used should a client challenge a decision or appeal a decision at the First-tier Tribunal for Scotland.
We have also considered how informal observations should be applied in client consultations. Practitioners will be provided with specific guidance, training and resources regarding informal observations. Clients must also be made aware of what informal observations are, why they are being made, and the impact they will have. All informal observations will also be made known to the client so that they have the opportunity to challenge or comment on the observation. This will provide a transparent consultation service by ensuring that clients are aware of what is being reported and recorded.
Targeted only where needed: Adult Disability Payment is intended to help mitigate the additional costs of having a disability. The rules for the benefit will be set out in these regulations and each new application will undergo an application process which will assess eligibility for Adult Disability Payment in a way that is consistent with the principles of dignity, fairness and respect.
As of July 2020, there were 273,901 people in Scotland entitled to Personal Independence Payment. This accounts for roughly 7.8% of the population between the ages of 16 and 65.
We have not previously published forecasts for new applications to Adult Disability Payment but Department for Work and Pensions outturn information shows that new applications for Personal Independence Payment (clearances) have been relatively stable at around 58,000 cases per year, amounting to 4,800 applications per month on average, although there is variation from month to month. It should be noted that this will not account for any differences resulting from Covid-19 which suppressed applications and decision making, particularly in April 2020.
Case managers will, where authorised, help clients gather supporting information through the previously mentioned data-sharing agreements. We are not looking to gather an exhaustive list of sources of formal information. It need only be sufficient to determine, on the basis of probabilities, that an individual meets the eligibility criteria for Adult Disability Payment. It is only when there is no other way to gather accurate information about the needs of a client that they will be invited to attend a client consultation.
The Social Security (Scotland) Act 2018 sets out the duty on Scottish Ministers to promote uptake of benefits for eligible individuals, and the Act requires Ministers to set out in parliament a benefit uptake strategy. Increased benefit uptake is likely to have a positive impact on businesses and the economy because more individuals will be in receipt of benefits which will be used to purchase a range of goods and services.
It is expected that the introduction of Adult Disability Payment could cause additional requests for information and support from existing advice services. However, it is anticipated that by introducing a system that has been designed in partnership with advice agencies, key stakeholders and individuals with experience of the current system, Social Security Scotland will be equipped to support individuals. This should lessen the impact on advice services in their provision of complex welfare rights casework support for individuals.
In July 2016 the Scottish Government launched a public consultation to support the development of a framework that would become the Social Security (Scotland) Bill. This received more than 200 responses to questions relating to disability benefits with an even split between organisational and individual responses. In particular comments were invited on a partial Business and Regulatory Impact Assessment.
There were 521 formal written responses submitted, of which 241 were from organisations and 280 from individual respondents. The 241 organisational responses included stakeholder groups representing human rights, disability and long term conditions organisations covering a variety of disabilities and conditions, and carers. The independent analysis of the responses along with the Scottish Government response were published on 22 February 2017 in addition to the Business and Regulatory Impact Assessment that was published alongside the Social Security (Scotland) Bill was used to inform the partial Business and Regulatory Impact Assessment for these regulations.
The Scottish Government has set up Social Security Experience Panels with over 2,400 people across Scotland registered as panel members when the Panels opened in 2017. The Panels involve people with lived experience of the benefits that are coming to Scotland.
The Consultation on Disability Assistance built on the work on the Experience Panels and was published on 5 March 2019. In line with the principles of dignity, fairness and respect, the Scottish Government sought the views of the people of Scotland on the three proposed disability assistance benefits, including Adult Disability Payment. The consultation closed on 28 May 2019, having received 263 replies, of which 74 were from stakeholder organisations and 189 from individuals.
The Scottish Government has also undertaken ongoing consultation with stakeholders through our independent Disability and Carers Benefits Expert Advisory Group (DACBEAG) as well as the Ill Health and Disability Benefits Stakeholder Reference Group. DACBEAG is chaired by Dr Jim McCormick and comprises individuals with significant practical experience of the United Kingdom social security system, from a range of professional backgrounds. It is independent of the Scottish Government. The Group's role is to advise Scottish Ministers on specific policy options for disability assistance and carers benefits due to be delivered in Scotland.
The Ill Health and Disability Benefits Stakeholder Reference Group was set up in March 2016 to inform and influence the development of policy options relating to devolved Disability Assistance. This group has advised on the potential impact of policy decisions as well as user and stakeholder engagement.
In addition to the above, the views of people with lived experience have been captured through a range of user research and stakeholder engagement activities held throughout Scotland. These events have provided stakeholders the opportunity to feed into the early development of policy discussions, raising awareness of the consultation and further exploring the views of stakeholders and service users in more depth. The events have also provided the Scottish Government opportunity to engage specifically with particular groups that would be impacted by the proposed policy.
Option 1 - Do Nothing
The transfer of powers to Scotland to make provision for Adult Disability Payment is set out in the Scotland Act 2016 and Social Security (Scotland) Act 2018. Therefore, not taking over powers from the Department for Work and Pensions was not considered to be a viable option.
There are not considered to be any benefits to this option.
If the Department for Work and Pensions were to stop making Personal Independence Payment payments to Scottish applicants and the Scottish Government did not provide a benefit to replace this provision, then up to 300,000 people entitled to Personal Independence Payment would be worse off as they would no longer receive a payment. This number is forecast to increase over time
Option 2 - Introduce Adult Disability Payment on same basis as Department for Work and Pensions including how it is delivered:
The Scottish Government could have replicated Personal Independence Payment with no changes made to eligibility, application process or integration with other benefits. However, this would have been inconsistent with the Social Security principles set out in the Social Security (Scotland) Act 2018 and would not have fitted with wider Scottish Government policy on disability assistance.
It would have left a benefit being administered that clients found stressful and lacking transparency, and one leading to a high level of inaccurate decisions and lack of support for clients.
Option 3: Introduce Adult Disability Payment (recommended option):
The Scottish Government will make first payments of Adult Disability Payment when it launches a pilot in spring 2022, with full rollout by summer 2022 incorporating all of the improvements set out above.
Sectors and groups affected
The impact of Adult Disability Payment is going to be dispersed across the country and sectors of the economy. To estimate the cost of Adult Disability Payment, it is possible to look at estimates of the cost of Personal Independence Payment when the Scottish Government took executive competence as estimated by the Scottish Fiscal Commission's forecasts conducted earlier this year. They estimated that the cost of Personal Independence Payment would be £1.583 billion in 2020/21. This rises to £1.65 billion in 2021/2022 and £1.714 in 2022/23.
Scottish Firms Impact Test
Scottish businesses, including the third sector, responded to A New Future for Social Security consultation during summer 2016. Responses were received from 14 private businesses and 5 business organisations all of which requested that their responses remain anonymous.
Stakeholder events were also run in tandem with the Consultation on Disability Assistance between 5 March and 28 May 2019 to obtain as wide a view as possible on the forthcoming Scottish social security system. Views were received from many different types of interested stakeholder organisations, such as Child Poverty Action Group in Scotland, Citizens Advice Scotland, the Scottish Association for Mental Health (SAMH), Engender, CEMVO Scotland, Rights Advice Scotland, LEAD Scotland, MND Scotland, National Deaf Children's Society, Royal Blind and Scottish War Blinded, the National Association of Welfare Rights Advisers, Down's Syndrome Scotland, Royal College of Paediatrics and Child Health, Scotland, One Parent Families Scotland, Children's Hospices Across Scotland (CHAS), The Poverty Alliance, Epilepsy Scotland and Glasgow Disability Alliance.
It is expected that the introduction of these regulations could cause additional requests for information and support from existing advice services. As a new benefit, this may result in additional pressure on advice agencies as they become familiar with it. The Scottish Government will continue to engage with the advice services sector as the programme to implement the social security system in Scotland progresses.
The Scottish Government does not believe that the introduction of Adult Disability Payment will have an adverse impact on the competitiveness of Scottish companies or the third sector within Scotland, the United Kingdom, or elsewhere in Europe or the rest of the world. The change does not directly or indirectly limit the number of suppliers, nor does it limit the ability of suppliers to compete or reduce suppliers' incentives to compete vigorously. Additionally the Scottish Government does not expect there to be any significant impact on the operational business of local authorities or health boards as a result of introducing this provision.
There may be some impact on public sector agencies and third sector organisations operating in Scotland in relation to the way the new Social Security Scotland agency delivers the devolved benefits compared to the status quo. These changes are unlikely to place significant demands on third sector organisations providing advice and support for people receiving and enquiring about social security payments and should not require a significant change to their operations.
The Scottish Government does not believe that Adult Disability Payment will have an adverse impact on the competitiveness of Scottish companies or the third sector within Scotland, the United Kingdom, or elsewhere in Europe or the rest of the world. Adult Disability Payment does not directly or indirectly limit the number of suppliers, nor does it limit the ability of suppliers to compete or reduce suppliers' incentives to compete vigorously. Additionally the Scottish Government does not expect there to be any significant impact on the operational business of local authorities or health boards as a result of introducing Adult Disability Payment.
Any procurement required to support the administration of Adult Disability Payment will be subject to the Public Contracts Scotland (2015) regulations and the Procurement Reform (Scotland) Act 2014, which together provide a national legislative framework for sustainable public procurement which supports Scotland's economic growth through improved procurement practice.
The Motability Scheme is currently the only national scheme that is open to eligible clients in receipt of the higher rate mobility component of Personal Independence Payment that can take advantage of certain tax exemptions that makes running a heavily discounted scheme financially sustainable. In ensuring that there is a devolved equivalent, we anticipate that the impact upon the existing supply chain of accessible vehicles and equipment will be nominal.
The Scottish Government has launched the Accessible Vehicles and Equipment Scheme to ensure that individuals in Scotland who receive a qualifying rate of disability assistance will be able to lease a range of cars, scooters and powered wheelchairs directly from a choice of accredited providers.
Accreditation under the Accessible Vehicles and Equipment Scheme is intended to allow other suppliers to join the Scheme – the Scheme does not directly or indirectly limit the number of suppliers, nor does it limit the ability of suppliers to compete or reduce suppliers' incentives to compete vigorously. Potential suppliers have a mechanism to request a review of a decision to refuse accreditation.
Social Security Scotland will arrange to pay the qualifying part of an individual's disability assistance to the accredited provider for the duration of a lease. Individuals who select the scheme to meet their mobility needs will not be subject to a credit check and will have access to a range of affordable choices directly from providers.
In the current system, assessments are carried out by private companies who do so on behalf of Department for Work and Pensions. Their assessors then produce reports which are used by Department for Work and Pensions decision makers to determine entitlement to Personal Independence Payment. In Scotland, this is carried out by Independent Assessment Services (formerly ATOS) or Capita.
We are replacing health assessments with client consultations. Consultations will be carried out by health and social care practitioners in Social Security Scotland. There is therefore no need to put any contracts out to tender.
Will the measure directly or indirectly limit the number or range of suppliers?
Will the measure limit the ability of suppliers to compete?
Will the measure limit suppliers' incentives to compete vigorously?
Will the measure limit the choices and information available to consumers?
Legal Aid Impact Test
Clients applying for Adult Disability Payment will have a right to request a re-determination of their entitlement by Social Security Scotland, and have a right of appeal to the First-Tier Tribunal for Scotland's Social Security Chamber.
It is not envisaged that there will be any greater demands placed on the legal aid system as a result of implementing this change, principally because the caseload is unlikely to change significantly. Legal assistance is available to individuals and is subject to a financial eligibility test based on the "disposable income" and "disposable capital" of the applicant.
It is a demand led budget and will continue to be available to individuals to appeal an entitlement decision to the First-tier Tribunal, to the Upper Tribunal, the Court of Session or Supreme Court. The Scottish Government does not expect any new impact on the legal aid budget, and expects legal assistance through the statutory scheme of Advice and Assistance, and Advice by Way of Representation will continue.
It is also expected that as a result of the extensive consultation and co-designed service design process, the decision making quality of Social Security Scotland will be improved and reduce appeals to tribunal by clients as a result.
Enforcement, sanctions and monitoring
On-going stakeholder engagement with key organisations – such as Child Poverty Action Group in Scotland, Citizens Advice Scotland, DACBEAG, and our Ill Health and Disability Benefit Stakeholder Reference Group – will provide the Scottish Government with an opportunity to monitor the impact of the changes made by these regulations.
The Communities Analysis Division within the Scottish Government will also run a comprehensive evaluation programme to consider the impact of the changes made by these regulations, with a full suite of equalities data for new applicants.
The Social Security (Scotland) Act 2018 places a duty on the Scottish Ministers to report annually to the Scottish Parliament on the performance of the Scottish social security system during the previous financial year. The report is to describe what the Scottish Ministers have done in that year to meet the expectations on them set out in the Social Security Charter.
The Scottish Ministers have also committed to engaging with, and reporting regular progress to, the Islands Strategic Group to ensure that those representing the interests of island communities and others with experience of the current system, are fairly represented in the development and delivery of the Scottish social security system.
Implementation and delivery plan
The Scottish Government intends to begin accepting applications from new clients from spring 2022, and at a later date, existing Department for Work and Pensions clients will transfer to Social Security Scotland without having to make a new application. Social Security Scotland will handle all aspects of the client's case to minimise stress and anxiety.
A communications strategy will be developed in advance of the launch of Adult Disability Payment, which will aim to ensure that individuals, their families and carers, the third sector, local government, health sector and advice providers are aware of the introduction of Adult Disability Payment, and understand the eligibility criteria. We will develop the communications strategy so that it will be linked in with wider Scottish Government initiatives for improving outcomes for disabled people.
As outlined above, the Communities Analysis Division within the Scottish Government will run a comprehensive evaluation programme to consider the impact of the changes made by these regulations, with a full suite of equalities data for new applicants.
Summary and recommendation
In summary, the Scottish Government has identified evidence that the introduction of Adult Disability Payment will constitute an investment into the Scottish economy. It is anticipated that these funds will be used to pay for care, goods and services and therefore businesses could benefit from the introduction of Adult Disability Payment.
Any impact to businesses as a result of these regulations should be positive or neutral. The Scottish Government have worked closely with stakeholders to develop the policy and will continue to do so until Adult Disability Payment opens for new applications, the transfer process of clients from Department for Work and Pensions to Social Security Scotland, and beyond.
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