Scottish Child Payment and the Labour Market - update 2026

Conclusion

The evidence made available over the last two years is consistent with the conclusions of the 2024 publication. Economic theory suggests that Scottish Child Payment can weaken financial incentives to work in some circumstances, particularly where increases in earnings would lead to the loss of a qualifying benefit and Scottish Child Payment entitlement. However, recent literature suggests these cliff-edge effects are likely to affect a relatively small share of recipients, as they occur at specific points in the earnings distribution rather than across the caseload as a whole.

This is reflected in both evaluation findings and labour market data. While some recipients report that Scottish Child Payment has influenced their labour market decisions, these experiences do not appear to be sufficiently widespread to be detected in population-level indicators. Taken together, the available evidence continues to suggest that Scottish Child Payment has not resulted in a detectable reduction in labour market participation across Scotland.