Five Family Payments evaluation: annex A - mixed methods research

1. Introduction

1.1. Child poverty in Scotland

Across the United Kingdom, poverty rates are highest among children [i]. The Child Poverty (Scotland) Act 2017 placed a statutory duty on the Scottish Government to achieve a series of child-poverty reduction targets by 2030[ii]. Scotland’s child poverty rates fell steeply between the late 1990s and the mid-2000s. However, in recent years the rate stabilised, and the current child poverty rate remains some distance from the Scottish Government’s target of fewer than 10% of children living in relative poverty and 5% of children living in absolute poverty[iii].

1.2. Policy context of the Five Family Payments

To help fulfil their duty to reduce child poverty, the Scottish Government has produced two delivery plans. The first child poverty delivery plan, ‘Every Child, Every Chance’, was published in March 2018[iv], with the second, ‘Best Start, Bright Futures’ published in March 2022[v]. Among other wide-ranging aims, these delivery plans set out to maximise financial support available to families to meet their basic needs and enable them to live dignified lives. The passing of the Social Security (Scotland) Act 2018 gave the Scottish Government powers to deliver social security benefits and resulted in the creation of a series of new benefits [vi]. These included the Five Family Payments (FFP), which provide support to families living on low incomes and play an important role in the government’s child-poverty reduction ambitions[vii].

As part of its commitment to tackling child poverty, the Scottish Government has identified six priority groups of families at increased risk of poverty [viii]. Compared with the average relative child poverty rate of 24%, rates of relative poverty in Scotland’s priority families are: 34% in families with a child under one year old; 55% in families with a mother aged under 25; 28% in households with a disabled family member; 39% in familes from minority ethnic backgrounds; 38% among lone parent families and 34% in families with three or more childrenviii.

1.3. The Five Family Payments

Families are eligible for FFP if the claimant or their partner live in Scotland, are pregnant or their child(ren) is/are an eligible age, are responsible for the child(ren), and they are in receipt of one of a range of means-tested benefits, including Universal Credit and legacy benefits such as Child and Working Tax Credits^[1], Pension Credit, Income Support, income-related Employment Support Allowance and income-based Job Seekers Allowance. Parents under 18 years old do not need to be on any payments or benefits to get Best Start Grant (BSG) and Best Start Foods (BSF). Parents aged 18 or 19 who do not receive any benefits or payments are eligible for BSG and BSF if their parent or carer receives Child Tax Credit, Child Benefit, Universal Credit child payments, or the child addition part of Pension Credit. Families with no recourse to public funds due to their immigration status, but who otherwise meet the financial criteria, may also be eligible for Best Start Foods.

Best Start Grant (BSG) payments were introduced between December 2018 and June 2019 to provide support for families on low income at three transition points in their child’s early life. To help prepare for the birth of a baby, the Pregnancy and Baby Payment provides a one-off payment of £754.56 for the first child and £377.35 for each subsequent child^[2]. The higher rate payment is available in certain circumstances for applicants with subsequent children; for example, for applicants with refugee status or under resettlement schemes whose other children were born before their arrival in the UK, and for applicants who have been forced to leave their homes due to domestic abuse. The Early Learning Payment (introduced in April 2019 and worth £314.45 in December 2024) is intended to support families with a child aged between 2 and 3.5 years with child development (e.g. to pay for trips out, toys and clothes). The School Age Payment (introduced in June 2019 and £314.45 in December 2024) contributes to the costs of preparing a child to start school (e.g. for school clothing, bags, stationery and school trips). The most up to date take-up rates for the three elements of BSG were 87% for the Pregnancy and Baby Payment (2022-2023), 87% for the Early Learning Payment (2021-2022), and 97% for the School Age Payment (2023-2024).

Best Start Foods (BSF) was introduced in 2019 as a replacement for the UK government’s Healthy Start Vouchers and aims to ensure that babies and children start life with a healthy diet. BSF is available during pregnancy and for children aged from birth to 3 years. BSF is a four-weekly payment of £21.20 during pregnancy, £21.20 for each child aged between one and three, and £42.40 for each child aged under one (rates of all payments at the time of the research). BSF payments are provided on a prepaid card. Recipients are advised to spend their BSF payments on a list of recommended foods, including fruit and vegetables, pulses, milk, eggs and infant formula. The estimated BSF take-up rate is 84% (2023-2024).

The Scottish Child Payment (SCP) opened for applications in November 2020 and payment began in February 2021 and is designed to reduce poverty among low income families with children aged under 16 (originally aged under 6)[ix]. At the time of the research, SCP was £26.70 a week per child^[3] and is paid every four weeks. Scottish Government modelling suggested that SCP could lift around 40,000 children out of relative poverty in 2025-26[x]. Take-up rates for the SCP are 89% (2023-2024) (95% for children aged 0 to 5 is the 2023 estimate)[xi].

1.4. Interim evaluations of the Five Family Payments

Separate interim evaluations of the BSG, BSF and SCP were conducted one to two years after their introduction. These evaluations focused primarily on assessing performance against immediate and short-term outcomes. The interim evaluations of BSG, BSF and SCP reported that most applicants found the payment to be easy to apply for and to have had a positive impact on their child’s physical and emotional wellbeing, and on the family’s financial wellbeing[xii]. However, the SCP interim evaluation also identified several issues with SCP. For example, while the SCP was making a relatively significant financial difference to families living on low incomes, £10 per week was insufficient to have a transformative impact particularly in light of increases in the cost of living. The interim evaluations also found that levels of awareness of FFP were also low among some groups.

In the interim evaluation of BSG, recipients generally reported that the application process was straightforward, and the grants had a positive impact on their household finances at potentially costly transitions in their child’s life[xiii].

The interim evaluation found that BSF increased the amount, quality and range of healthy foods that families ate, and reduced food insecurity[xiv]. While the interim evaluation found that BSF payments were easy to apply for and relatively easy to use, some recipients had problems activating and using the card.

1.5. Developments since the interim evaluations

Several changes to FFP have occurred since the interim evaluations were conducted, with the aim of reducing child poverty:

• In November 2022, the SCP increased from £10 per week to £25. At the time of the research SCP was £26.70 per week.
• In November 2022, eligibility for SCP was extended from children up to the age of 6, to children up to age 16.
• From 28^th November 2022, SCP applicants are asked if they would like to apply for BSG and/or BSF at the same time as SCP.
• From November 2022 the BSG Early Learning Payment and School Age Payment are automatically paid to eligible recipients of SCP without the need to apply when their child reaches the eligible age. However, a recipient can opt-out of receiving these payments automatically and can choose to apply for the Payments manually.
• In February 2024, income thresholds applied to BSF eligibility were removed, increasing the number of families eligible for the payment.

While the value of SCP has increased, families have also faced steeply rising costs. The cost-of-living crisis has impacted greatly on low-income families who spend a large proportion of their incomes on food and energy. Steep increases in food price inflation have reduced the value of BSF in real terms. While the value of BSF increased in line with the overall inflation rate in April 2023 (10.1%), food price inflation stood at 19.1% in the same month[xv]. While food price inflation has now fallen to around 3%, food prices remain high compared with recent years[xvi]. For example, the price of infant formula has increased by 25% over the last two years [xvii]. Feeding a 10-week-old baby on first stage infant formula costs between £44 and £89 per month – more than the amount available each month for BSF recipients with a child aged under 1 yearxvii.

Finally, there is evidence that SCP may be having a positive impact on child poverty rates in Scotland. A recent report by the Joseph Rowntree Foundation notes that Scotland’s child poverty rate of 24% is lower than the rates in England (30%) and Wales (29%)i. The report suggests that this difference in rates is likely, in part, to be due to the availability of SCP.

1.6. The study

Building on the findings of the interim evaluations, this mixed methods study explores families’ experiences of receiving the FFP and the impacts of the payments on their financial circumstances, health and wellbeing, and economic participation. The study also explores awareness of and engagement with the FFP among priority families who are at greatest risk of poverty and of marginalisation from the social security system.

The Social Security (Scotland) Act 2018 introduced eight principles to guide the delivery of social security in Scotland, one of which is to design an evidence-based social security systemvi. This study provides evidence on the extent to which the FFP are adhering to other relevant principles of the Social Security (Scotland) Act 2018, namely that they are an investment in people, they are helping to reduce poverty and they are providing value for money.

The findings from this research will be combined with data from a range of other sources (e.g., Management Information, Social Security Scotland research and population surveys) to form the overall policy evaluation of the FFP. The findings provide timely and robust information on the experience and impact of receiving the FFP and will set the groundwork for potential policy improvements and inform future evaluations of the FFP.