Scottish Child Payment and the Labour Market - update 2026

Executive Summary

Scottish Child Payment (SCP) is available to children in low-income households in receipt of certain qualifying benefits, including Universal Credit. As eligibility for these benefits is linked to earned income, understanding the relationship between SCP and labour market choices is important when considering the payments wider impacts.

This publication provides an update to Scottish Child Payment and the labour market, published in July 2024. Since the previous report, SCP has been uprated from £26.70 to £27.15 per eligible child per week in April 2025, and to £28.20 in April 2026. The Scottish Government has also announced plans to introduce a premium in 2027-28, increasing the payment to £40 per week for eligible children under one.

The constraints on analysis of SCP's impact on the labour market identified in the July 2024 publication continue to apply. In particular, it remains challenging to identify and measure the impact of SCP on labour market decisions using the available administrative data.

Updated labour market indicators provide no suggestion that SCP has affected labour market behaviour at a population level. Trends in Scotland have generally remained similar to those observed in England.

External evidence published since July 2024 is consistent with these findings. New research provides no consistent evidence that SCP has reduced employment, labour market participation or working hours, while Scottish Government evaluation evidence suggests that SCP can affect work decisions in different ways for different families, although most recipients report no impact on their work situation.

Overall, the evidence made available since July 2024 does not alter the conclusions of the previous report. While SCP may affect labour market decisions for some individuals, there remains no evidence that it has led to detectable reductions in employment or labour supply at a population level. However, this analysis is not sufficient to conclude that further increases in the value of SCP will not have an effect on the labour market.