Publication - Progress report

Scottish Child Payment: position paper - June 2019

Published: 26 Jun 2019
Directorate:
Social Security Directorate
Part of:
Children and families, Equality and rights
ISBN:
9781787819870

Process of development of the Scottish Child Payment and the expected policy impacts it will have.

11 page PDF

229.3 kB

11 page PDF

229.3 kB

Contents
Scottish Child Payment: position paper - June 2019
Scottish Child Payment Policy And Delivery Detail

11 page PDF

229.3 kB

Scottish Child Payment Policy And Delivery Detail

Having taken into consideration both the policy modelling and analysis, the delivery and timing implications and the impact on the existing Social Security Programme, we concluded that a refined version of Option 2, as set out in the analysis report, is one that balances the risks against the benefits. This option fits with our criteria of targeting those families who need it, maximising resources available and is one which could be delivered speedily and with dignity and respect, within the lifetime of the current Tackling Child Poverty Delivery Plan.

We intend to introduce this new benefit by the end of 2022 to all children under 16 in eligible families.

We anticipate that an estimated 410,000 children will be eligible for the benefit.[4]

It will be an application-based payment to families in receipt of UC delivered by Social Security Scotland. Given the lifetime of our plan and our desire to reduce child poverty and as payments will begin before UC is fully in place to all families, we have also included other qualifying benefits, as set out below.

While we will build on the existing low income benefit infrastructure additional development is still needed, including ensuring we have all relevant data from the UK Government for children under 16, and to configure the platform to manage the caseload.

As with all our benefits, we will work in close partnership with the UK Government, especially the DWP so they can make the necessary changes to their systems, and support our development of the new benefit. We will progress these discussions over the summer.

Early delivery

We are aware that child poverty is deep-seated and that it can affect the life chances of children. We want to change that.

We will therefore introduce this payment for eligible children under 6 at an earlier date and will begin payments by the end of this parliamentary term.

We anticipate that around 170,000 children in around 140,000 households will be eligible for the Scottish Child Payment in this age group.

Almost 60% of children living in poverty are in households where the youngest child is under 6 years old. As such, policies that help families with children in the early year's age groups are likely to be impactful.

Payment

This will be a regular cash payment families who are in receipt of qualifying benefits and who have responsibility for a child.

The rate will be £10 per week, per child, to be paid on a monthly basis.

The Scottish Child Payment will not have any cap on the number of eligible children a family can receive a payment for. The Scottish Government firmly rejects the punitive approach taken forward by the UK Government, such as the two-child limit

and the 'rape clause', and instead is putting in place a devolved social security system with dignity and respect at its heart.

Payments will be made to an individual, on behalf of a household. The payment process will use technology being built for the existing devolved benefits, with payments made monthly to the client's bank account.

Further details – such as processing times, client communication, and appeals – will be finalised as we progress the design of the benefit, but we would ensure we aligned with existing and established processes within Social Security Scotland which have gone through detailed user research.

Eligibility and process

Given that we are delivering Scottish Child Payment before UC migration will have completed, we will extend eligibility to families in receipt of other benefits. The qualifying benefits will be:

  • Child Tax Credit
  • Universal Credit
  • Income Support
  • Pension Credit
  • Working Tax Credit
  • Housing Benefit
  • Income-based Jobseeker's Allowance (JSA)
  • Income-related Employment and Support Allowance (ESA)

The application process will follow established procedures within Social Security Scotland, ensuring we reduce the barriers to claiming, promote take up, make the process as simple and straightforward as possible, and ensure clients are treated with dignity and respect. The expectation, as with the other benefits being delivered by the agency, is that people would have three channels by which they could apply: online, by phone, or via a paper form.

The application, which would be made by an individual on behalf of a household, will be as light touch as possible, and similar to the existing application for Best Start Grant, ensuring that only information that is required to make a payment is requested. This includes information on what qualifying benefit the client is in receipt of, which Social Security Scotland would then use to verify that the individual is eligible.

Policy impacts

As noted previously, the headline objective for the Scottish Child Payment is to help secure at least a 3 percentage point reduction in the relative child poverty rate (after housing costs) against the baseline. As shown in the table below, a payment of at least £10 per week, per child, could be expected to secure this.

In common with all the devolved benefits, we want to maximise take-up and ensure all eligible families are receiving the support they are entitled to. The Scottish Child Payment will be a key feature of future benefit take-up campaigns, and we will work closely with stakeholders to promote it widely.

Table 2 - Poverty impact, payments to children aged 0-16 in 2023/24

Illustrative weekly payment per child Change in children in relative poverty Number of children eligible Number of children reached Of which: % of 0-16 children in poverty reached % of children in poverty reached Policy Cost
in poverty vs not in poverty
£10 -30,000* (-3 p.p.) 410,000 340,000 45% vs 55%** 80%** 65%** £180 million

Source: Scottish Government's own analysis using DWP's Policy Simulation Model for Scotland
*The modelling assumes a take-up rate of 83% (which is the Child Tax Credits take-up)
** These ratios are subject to a high level of uncertainty due to the potential for take-up rates to differ across different household types.

Distributional analysis

As shown in Table 2, to ensure that we reach as many children in poverty as possible, we also need to provide payments for children in households above the relative poverty threshold. Since a significant proportion will sit just above the poverty line, as well as lifting families over the poverty threshold, the policy helps ensure that those just above the threshold, perhaps on insecure incomes, do not fall into poverty. This should also help make progress towards the Child Poverty Act low income/material deprivation target, which uses a higher poverty threshold.

The chart below shows the distributional impact, and where children benefitting from the proposed Scottish Child Payment would fall across the income deciles[5]. With almost two thirds in the first three deciles, there is a clear progressive element to this policy.

Source: Scottish Government's own analysis using DWP's Policy Simulation Model for Scotland
* Due to rounding decile figures may not sum up to 340,000 children


Contact

Email: Gary.Murdie@gov.scot