Consultation on regulations and statutory guidance under the Welfare Funds (Scotland) Act 2015: Analysis of Responses

3 DEFINING LOW INCOME (Q1 AND Q2)

3.1 SWF grants are intended for people who are low incomes, and cannot access assistance elsewhere. One of the indicators of a person being on a low income under the interim SWF is that he / she is entitled to certain benefits from the DWP. However, if a person is not entitled to one of these benefits, local authorities can use other information (including information they hold about a person’s entitlement to housing benefit or council tax benefit) to decide if that person is on a low income. This approach gives local authorities the flexibility to award grants to people who are on a low income for a wide range of reasons, and is more efficient and cost-effective than undertaking a full income assessment. However, it also means that there can be differences between local authorities in how decisions are made about what a low income is.

3.2 The consultation document asked respondents to give their views on possible methods that local authorities could use to decide whether an applicant is on a low income. Three options were presented, as set out below, with option 1 effectively representing the status quo.

• Option 1 – Continue to use the same method as for the interim SWF: Local authority decision makers make a judgement on whether the applicant is on a low income based on the information given by the applicant, which benefits they are entitled to and information they already have in their other benefit systems. This will mean that local authorities use slightly different methods to define low income, as they do now.

• Option 2 – Make a list of different ‘approved’ ways that local authority decision makers could use to decide whether the applicant is on a low income: This might include considering the applicant’s entitlement to certain welfare benefits, levels of tax credits, council tax reduction or housing benefit. This would still mean some variation but less than under the current system.

• Option 3 – Decide a set level of income and ask local authorities not to make grants to anyone whose income is higher. The level of income could be different depending on what sort of household the applicant is in. This approach would reduce variation between local authorities but would also mean that local authorities cannot make their own judgements about whether to give someone a grant if their income is above the set level.

3.3 The consultation asked respondents two questions on this issue:

Question 1: Is it a problem that local authorities use different ways to decide whether or not a Scottish Welfare Fund (SWF) applicant is on a low income to check that they are eligible for an award? (Yes / No)

Please explain your answer.

Question 2: What is the best way for a local authority to decide that an SWF applicant is on a low income? (Option 1 / Option 2 / Option 3 / Other – please give details).

Please tell us why you have chosen this option and explain the advantages and disadvantages.

Views on the current arrangements (Q1)

3.4 Table 3.1 below shows that around two-thirds of respondents (67%) thought it was a problem that local authorities currently use different ways to decide eligibility for a SWF grant. However, a third (33%) did not see it as a problem. Third sector organisations, ‘Other’ organisational respondents and individual respondents were most likely to see variation in local authority decision making as a problem, whereas housing organisations were divided in their views on this issue, and a majority of local authority respondents did not see it as an issue.

Table 3.1: Is it a problem that local authorities use different ways to decide whether or not a SWF applicant is on a low income to check that they are eligible for an award?

	Yes		No		Total
Local government	7	44%	9	56%	16	100%
Third sector / equality organisations	13	93%	1	7%	14	100%
Housing organisations	4	57%	3	43%	7	100%
Other organisational respondents	4	100%	–	0%	4	100%
Individuals	5	63%	3	38%	8	100%
Total	33	67%	16	33%	49	100%

3.5 Fifty-six (56) respondents (48 organisations and 8 individuals) submitted comments at Question 1. Irrespective of whether respondents ticked ‘yes’ or ‘no’, they often made similar points in their comments. Those who ticked ‘no’ generally argued for the importance of flexibility and discretion to take into account each individual’s circumstances and local costs of living. Those who ticked ‘yes’ generally emphasised a need for greater consistency in decision making, but also wanted local authorities to be able to retain the ability to exercise discretion.

Calls for greater consistency

3.6 The main point made by those who answered ‘yes’ to Question 1 was that greater consistency in local authority decision making would be desirable. Respondents repeatedly highlighted the potential for inequity and unfairness if an application to one local authority resulted in the award of a grant, while the same application to another authority might not. Some respondents gave specific examples of cases they were aware of where this had occurred.

3.7 This group of respondents made the point that inconsistencies between local authorities in their decision making was confusing – not only for applicants, but also for housing, information and advice agencies working across multiple authorities to support applicants.

3.8 Two other points made by this group, less often, were that: (i) greater consistency would make the work of the SPSO easier; and (ii) inconsistent thresholds for grants across Scotland would result in inconsistencies in monitoring and reporting for national statistics, thus potentially masking the real level of demand for SWF grants.

3.9 Despite the calls for more consistency in decision making, respondents nevertheless also wanted local authorities to retain the ability to be flexible and use their discretion.

Need for flexibility

3.10 Those who ticked ‘no’ in response to Question 1 generally highlighted the importance of local authority decision makers having the flexibility and discretion to give grants to those who are most in need – while also taking into account local economic conditions. This group pointed out that one aspect of local decision making involves a consideration of the local cost of living – i.e. housing costs are higher in some parts of Scotland; food and transport costs are higher in rural areas, etc. This group also argued that if a rigid set of criteria were applied in determining eligibility for SWF grants – for the purpose of achieving consistency across local authorities – it would remove the possibility of awarding grants to people who are clearly in need, but who may not meet the criteria.

3.11 Some respondents commented that existing SWF guidance was helpful and facilitated a generally consistent approach across local authorities. However, others acknowledged that there were some inconsistencies in decision making between local authorities, but they believed that these inconsistencies could be explained and were reasonable. Thus, this group thought that the current arrangements are largely working well. Some respondents pointed to safeguards available for applicants (i.e. review processes), and local forums that helped to promote good practice (i.e. local SWF practitioners’ groups).

Other issues

3.12 Respondents in both groups commented that there continued to be some confusion about whether entitlement to certain DWP benefits was a pre-requisite to applying for an SWF grant. There was a perception that some local authorities would not accept applications from individuals who were not in receipt of one of the qualifying benefits – or that applications from those not in receipt of benefits would only be considered in exceptional circumstances. There was a feeling that statements to this effect were discouraging many potential applicants. Respondents emphasised the importance of clear information to applicants on this point, and there was general agreement among respondents that ‘low income’ should not be defined solely as an entitlement to or receipt of benefits.

Ways of deciding if an applicant is on a low income (Q2)

3.13 Table 3.2 below shows the number and proportion of respondents who chose each of the three options presented. (See again paragraph 3.2 above.) The table shows that the largest proportion of respondents (46%) chose Option 2 (make a list of different ‘approved’ ways that local authority decision makers could use to decide whether the applicant is on a low income). In addition, of the 13 respondents (23%) who selected ‘Other’ in response to this question, nine of these advocated a slight variation of the Option 2 approach (discussed below). Option 3 (set a low income threshold, with no grants made to people whose income is above the threshold) was the least popular option, selected by six respondents (11%).

3.14 One of the respondents to the Easy Read consultation chose Option 2 and the other chose Option 3 in response to this question.

Table 3.2: What is the best way for a local authority to decide that an SWF applicant is on a low income?

	Option 1		Option 2		Option 3		Other		Total
Local government	6	33%	9	50%	2	11%	1	6%	18	100%
Third sector / equality organisations	3	17%	7	39%	2	11%	6	33%	18	100%
Housing organisations	1	13%	6	75%	1	13%	–	0%	8	100%
Other organisational respondents	–	0%	1	25%	1	25%	2	50%	4	100%
Individuals	1	13%	3	38%	–	0%	4	50%	8	100%
Total	11	20%	26	46%	6	11%	13	23%	56	100%

3.15 Fifty-four respondents (48 organisations and 6 individuals) made comments at Question 2. Irrespective of whether they chose Option 1, 2 or 3, or advocated an ‘Other’ option, the main focus of respondents’ comments was about finding the most appropriate balance between having greater consistency and transparency in decision making on the one hand, and having a flexible system that allowed for discretion on the other. Respondents (including those who chose Option 3) were nearly unanimous in wanting some level of discretion to remain in decision making – a view endorsed by one of the respondents to the Easy Read consultation.

3.16 A recurring theme in the comments on Question 2 (as in Question 1) was that respondents did not want grant eligibility to be linked entirely to applicants’ entitlement (or receipt) of certain benefits. They did however largely support the idea (stated in the interim guidance) that if an individual’s income was ‘equivalent to that of someone living on benefits’, then they should be considered as having low income. Respondents gave examples of numerous situations in which people may be in crisis or on a very low income, but not be in receipt (or eligible for) benefits, e.g. people in the process of moving into work; those who are in work, but on a very low income; women experiencing domestic abuse; refugees; older people who are entitled to Pension Credit, but who do not claim it, etc.

3.17 Related to this point, some respondents emphasised that decisions should primarily be based on the applicant’s need and vulnerability, rather than on the basis of their household income or eligibility for benefits. Occasionally, it may be appropriate for people on higher incomes to receive assistance, since a sudden crisis or an emergency can affect anyone (e.g. an individual’s purse is stolen with all their money and cards). Thus, it was suggested that the ‘low income’ test was perhaps more relevant in relation to CCG applications, rather than CG applications, which should focus on the nature of the crisis experienced by the applicant.

3.18 Option 2 was generally seen as promoting the greatest level of consistency in decision making, while still giving local authorities discretion and flexibility.

Advantages and disadvantages of the three options

3.19 Views about the advantages and disadvantages of each of the three options may be summarised as follows:

• Option 1 (the status quo / current arrangement)
  • Advantages: Flexible; allows decision makers to consider each application on its merit; enables discretion to award grants to anyone who is in need / crisis, regardless of income, taking into account local economic circumstances
  • Disadvantages: Inconsistency in decision making between local authorities; confusing for applicants and agencies that support them; makes the work of the SPSO more difficult.
• Option 2 (list of different ‘approved’ ways that local authority decision makers could use to decide whether the applicant is on a low income – local authorities could use the best way for their systems)
  • Advantages: Provides greater consistency and transparency, but also allows individual and local circumstances to be taken into account
  • Disadvantages: Could result in over-subscription to the SWF in different areas; move towards an ‘entitlement’-based approach, and away from discretionary approach; still likely to be some inconsistency in decision making.
• Option 3 (set a low income threshold above which no grants will be made)
  • Advantages: Clearer and more consistent decision making
  • Disadvantages: Reduces flexibility and discretion to give grants to people whose income may be (marginally) above the threshold; will likely exclude people who are vulnerable and in crisis.

‘Other’ options

3.20 As noted above at paragraph 3.14, 13 respondents ticked ‘Other’ in response to Question 2. One of these discussed perceived problems with the current scheme (in particular that it discriminated against people who are disabled and / or with long term conditions). A second respondent discussed a locally developed tool which provided a ‘rule of thumb’ guide to support decision making. Two respondents discussed the importance of not only considering an applicant’s income, but their disposable income. (This view was endorsed by one of the respondents to the Easy Read consultation.)

3.21 The remaining nine in this group supported a slight variation of the Option 2 approach. This group emphasised the importance of not restricting the definition of ‘low income’ to the entitlement (or receipt) of certain qualifying benefits. Some respondents (both in this group and among those who chose Option 2) also made suggestions for other things that could be added to the list of ‘approved’ methods. These included:

• In receipt of working tax credits
• Eligible for (or in receipt of) disability-related benefits (Disability Living Allowance, Personal Independence Payment (PIP) or Armed Forces Disability Payments)
• Reference to a bank statement, or to ‘a trusted official / caseworker’ (e.g. in the NHS, social work, or third sector service).

3.22 The point was also made that disability-related benefits should not be considered as ‘income’ in any attempt to calculate an applicant’s income.