Financial insecurity: guidance to local authorities over winter 2021-2022

Guidance to assist local authorities in deploying funding to support households experiencing financial insecurity over the winter 2021-2022.

Local authorities will be able to use their allocation from this £25 million funding flexibly to tackle financial insecurity over Winter 2021-22. Action may include:

  • Emergency financial assistance, such as:
    • Supplementing local budgets for the Scottish Welfare Fund
    • Boosting local funding for Discretionary Housing Payments
    • Proactive financial assistance to support those likely to experience hardship – including people who may have been impacted by the cut to Universal Credit and those who may not be eligible for mainstream or other support
    • Build upon supports already delivered by local authorities, such as Scottish Child Payment Bridging Payments.
    • Financial assistance to access to food, fuel and other essentials
  • Direct assistance to access food, fuel and other essentials where this is more appropriate or is the preference of individuals themselves
  • Other activities and services, as necessary, to support individuals to overcome financial crisis and support wellbeing, including targeted activity to support marginalised groups, activity to prevent and address homelessness, and funding to community and third sector organisations

Payment and reporting

Funding will be allocated to local authorities through a redetermination to General Revenue Grant with payments in the final two weeks of the current financial year.

Light touch monitoring reporting templates should be returned in April 2022 to Uplift to budgets for the Scottish Welfare Fund and Discretionary Housing Payments should be reported through the standard processes, highlighting where funds have been deployed from this package.


The Department for Work and Pensions have advised that local welfare provision -  such as financial and in-kind payments made by a local authority to help meet an immediate short term need arising out of an exceptional event or exceptional circumstances, and that requires to be met to avoid a risk to the wellbeing of an individual - will be disregarded when it comes to legacy benefits. This means that a crisis cash payment, voucher or card provided by a local authority should not affect social security entitlement under the current circumstances.

Where assistance is provided to an individual in receipt of Universal Credit (UC), it would be treated as capital. However, it would only affect that individual’s entitlement if it brought their total capital above £6,000. Capital of under £6,000 has no effect on UC. If assistance were provided in the form of a non-exchangeable voucher, it is unlikely it could be considered capital and therefore unlikely to affect an individual’s UC entitlement.

Local authorities may wish to advise households in receipt of Universal Credit who are concerned that support provided could impact on their award to report this in their journal by signing in to their Universal Credit account or by calling the Universal Credit helpline on 0800 328 5644.

HMRC have indicated that local welfare provision of this nature would be disregarded as income for tax and benefit purposes.
The Council Tax Reduction (Scotland) Regulations 2012 outline sums to be disregarded for council tax reduction purposes. Local authorities would need to satisfy themselves that payments were made utilising appropriate and exempted powers.

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