Poverty and Income Inequality in Scotland 2022-25

9   Methodological changes

This section provides details of recent methodological changes to the statistics.

9.1   Development of Family Resources Survey data

As previously announced in the HBAI release strategy, these statistics have been revised from 2021/22 following a methodological change which links FRS data with administrative records on social security benefits provided by DWP and tax credits. In summer 2026, a follow up publication will include revisions for further years back to 2018/19.

The new method aims to correct for the known undercount of benefit receipt reported through the survey. The method replaces most survey‑reported benefit income and tax credits with data derived from administrative records.  It also adds benefit income for households who did not report benefits in the survey, but appear in the administrative records, and removes them if they are not in the administrative data but were originally reported through the FRS. 

Full methodological information on the linkage has been published by DWP under FRS transformation.

9.2   Presentation of changes

Within the report, the introduction of data linkage has been presented as follows

• On charts, we have shown a break in the series with a grey vertical line. We advise users not to make a direct comparison of changes before and after the integration of administrative data. Additionally, three-year estimates for 2019-22 have not been presented as they include one year of linked data (2021/22) and one year of unlinked data (2019/20). 
• In the excel publication tables, lines have been added to clearly identify where the integration of administrative data starts. Please note that the location of lines differs for the one-year and three-year estimates. Similar to the chart presentation, estimates for the period 2019-22 have been removed.

9.3   Official statistics in development and future plans

As outlined in the introduction, this publication has been badged as official statistics in development to highlight to users both the methodological changes outlined above and planned changes to the statistics next year. The devolved administrations (including the Northern Ireland Department for Communities and the Welsh Government) have adopted the same approach but DWP’s UK outputs remain accredited official statistics due to having a larger data sample and higher levels of confidence in results.

In summary the following developments are planned:

• In summer 2026, the statistics will be further revised, with data linkage being going back to 2018/19. This will provide a longer time series on the same basis to make comparisons. Because the break in series will be at 2018/19 the 2024/25 reference year for absolute poverty will also be applied back to 2018/19. The 2010/11 reference year will be maintained prior to 2018/19.
• For the 2027 publication, the way the statistics are scaled to population totals (known as grossing) will be updated. This update will incorporate the latest census population data and may result in further revisions to the poverty rates. Future changes are announced in the FRS release strategy, which is updated periodically as plans develop.

The development of data linkage to benefits will improve the quality of data in the longer term but there will be a period of flux. It is our intention that the official statistics in development badge is a temporary status. This acknowledges that methods are in transition, enables clearer guidance to users on what is changing and why, and transparently signals uncertainty in the estimates and any trend comparisons, with figures subject to revision as developments are rolled out. A letter from the Scottish Government outlining the change in designation is published on the Office for Statistics Regulation website.

Users should be aware because the FRS data transformation has disrupted trends, we are publishing a shorter report this year. We have therefore not included charts showing poverty rates by child poverty priority groups or equality groups, though all statistics remain available in the accompanying spreadsheets. We will review publication content once a longer data series is available in March 2027 and we are better able to consider trends for population subgroups. Similarly, we have not presented charts on food security, but these results are still contained in the spreadsheets.

9.4   Scottish Child Payment

Scottish Child Payment (SCP) was introduced in February 2021 for low income families with children under 6 years old and eligibility was extended to under 16-year olds from November 2022. The FRS began collecting data on Scottish Child Payment (SCP) in the 2020/2021 survey year but undercounts of the benefit were observed.

SCP receipt is imputed for FRS benefit units that qualify because they already receive benefits like Universal Credit and Jobseeker’s Allowance. The imputation uses age-specific take-up rates to create more precise estimates of SCP income for its use within the FRS dataset.  The method was agreed in consultation between SG and DWP analysts and is applied to the 2023/24 and 2024/25 datasets.  This year SCP levels for 2022/23 were also revised to account for the eligibility being extended to a wider age range part way through the survey year.

Because data linkage has resulted in an increase in the FRS coverage of Universal Credit and other qualifying benefits, the coverage of SCP has also increased.  DWP have published comparisons between the 2024/25 estimated level of SCP recipients through the FRS and the administrative caseload in their methodology tables. The undercount of 5% for 2024/25 is an improvement of the undercount of 25% for 2023/24 prior to data linkage.

9.5   Treatment of devolved Scottish disability benefits

Devolved Scottish benefits are not included in the linkage at this stage. However, DWP have taken steps to make the largest Scotland-specific benefits marry up more closely to known caseloads.  For the 2023/24 and 2024/25 survey years this applies to Child Disability Payment and Adult Disability Payment.  

Child Disability Payment (CDP) is the replacement for Disability Living Allowance (DLA) for children in Scotland, which was previously delivered by DWP.  Payments started in August 2021, beginning with a small caseload and increasing as cases were transferred from DWP to Social Security Scotland. It provides money to help with the extra care and mobility costs that a child or young person living with a disability might have.

Adult Disability Payment (ADP) is the replacement for Personal Independence Payment (PIP) and DLA for adults in Scotland, which were previously delivered by DWP. Payments started in April 2022, beginning with a small caseload and increasing as cases were transferred from DWP to Social Security Scotland. It provides money to help with the extra daily living and mobility costs that a person living with a disability might have.

The linkage process matches FRS survey responses to central administrative data on benefits, based on national insurance numbers.  There is evidence that some Scottish respondents still report PIP or DLA by mistake, even though they have already been moved onto the new Scottish benefits. Because of this, the system cannot find a matching record. 

When the system cannot match the benefit reported in the survey to the administrative records, the survey entry is typically removed from the dataset. To avoid undercounting Scottish disability benefits, DWP analysts have reinstated the PIP or DLA questionnaire responses manually and recoded them as the correct Scottish benefit.

No adjustments were made for Scottish disability benefits in the 2022–23 survey year because the caseloads were still relatively small. Any cases where PIP or DLA were genuinely still being paid in Scotland will be reflected in the statistics, as these will match the administrative records correctly.

DWP continue to research the integration of other administrative sources, including HMRC data on earnings.  DWP have received authorised access to Social Security Scotland’s administrative records on devolved benefits.  Processes will need to be set up and tested so these data may be linked to the FRS data as part of future developments.