The people of Scotland continue to face challenging economic conditions with relatively high inflation and the everyday cost of living continuing to increase. However, since reaching a record high of 11.1% (CPI) in October 2022, inflation has started to slow, and it is now expected to be below the Bank of England's target of 2%, in the second quarter of 2025.
The purpose of this report is to set out the impact of inflation (the rate of change in prices), on Scottish social security payments and to detail the Scottish Government's approach to up-rating these payments for 2024-2025.
Using the Consumer Prices Index in the 12 months to September 2023, each form of assistance has been adjusted for inflation in the report. We have also included the rates of all social security payments that will be paid from April 2024. As part of the Social Security (Scotland) Act 2018, we are required to increase the Scottish Child Payment, employment injuries related benefits, funeral expense assistance, and disability and carers' benefits by inflation, bringing forth legislation in early 2024 to facilitate this.
With the full national roll out of Carer Support Payment by Autumn 2024, Social Security Scotland will be responsible for the delivery of fourteen benefits to the people of Scotland. I am proud that the Scottish Child Payment remains one of them. This payment, which is entirely unique to Scotland, has provided families with crucial financial support, reducing poverty and helping to guard against the full impacts of the cost of living crisis. Over 323,000 children under the age of 16 were receiving Scottish Child Payment at the end of September 2023 and the total amount of this benefit paid out since its February 2021 launch stands at £459 million.
Additionally, in February 2023 we launched our new Winter Heating Payment, providing targeted and consistent financial support to assist low-income households with their heating expenses each winter. Unlike the equivalent Cold Weather Payment provided by the UK Government, the Winter Heating Payment does not depend on how cold the temperature gets. Removing the reliance on weather conditions means that every person identified as requiring that additional support will receive it. By April 2023, around 395,000 payments of £50 had been made to help people with their heating expenses, totalling financial support of almost £20 million.
From February 2024, we will also provide support to families by introducing regulations that remove income thresholds and expand the eligibility for Best Start Foods to around an additional 20,000 people.
The Scottish Government remains fiercely committed to providing support for those who need it most, in an effort to reduce inequality and tackle poverty. Increasing benefits annually, after taking into consideration the impact of inflation, remains a critical part of our approach.
Cabinet Secretary for Social Justice
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