Scotland Act 2016 implementation: seventh annual report

Report to inform parliament of the implementation work that has been carried out on fiscal powers devolved in the Scotland Act 2016.

7. Social Security

Part 3 of the Scotland Act 2016 contains 14 Sections relating to social security and employment support.

The Scottish Government is responsible for the implementation of these powers, ensuring the safe and secure transition of the benefits being devolved to Scotland and the design of new benefits as part of a Scottish social security system with dignity, fairness and respect at its heart. To achieve this, the Social Security Programme was established and a new agency, Social Security Scotland, created.

Social Security Scotland operates in accordance with the eight principles set out in the Social Security Charter and Social Security (Scotland) Act 2018. This sets the framework to ensure that social security in Scotland meets the needs of Scottish citizens.

Social Security Scotland is already successfully delivering thirteen benefits and, once fully transferred, the Scottish Parliament and Scottish Government will be responsible for the delivery of 16.5 million payments per year, worth £6 billion by 2024-25 to an estimated two million people in Scotland.


Table 7.1: Implementation and Administrative Costs
£m 2020-21 2021-22 2022-23
Social Security Scotland 131 206 308
Advice, Policy and Programme 123 148 177
Of which: Programme Implementation 104 104 111

67. The costs set out in Table 7.1 have been updated following last year’s report and are either audited outturn or budget. Social Security Scotland includes a range of administration and operational costs to support the delivery of payments and services. The work that the Scottish Government undertakes is funded from the Advice, Policy and Programme budget line within the Scottish Government’s Social Justice Portfolio. The table shows the Resource and Capital costs of the work that the Scottish Government undertakes, including the Implementation Costs of the Social Security Programme. The figure excludes the allocated share of the Scottish Government’s Corporate Running Costs and ring-fenced non-cash Depreciation.

68. A more detailed breakdown can be found in the updated Social Security Programme Business Case (PBC), published in February 2023[13]. The costs detailed in the PBC reflect the necessary changes stemming from the pandemic including an additional year of delivery to support safe and secure benefit delivery and case transfer the awards of around 700,000 clients from DWP to Social Security Scotland, as well as adding the Scottish Child Payment extension into the Programme and providing increased functionality for our most complex benefits.

69. The PBC provides a view on the whole-life costs and benefits of the Scottish Government’s Social Security Programme, over a 30-year timeframe to 2050. It shows the Scottish Government’s investment in creating a new public service for Scotland, co-designed by those with lived experience and built from scratch with dignity, fairness and respect at its heart, which will deliver for the people of Scotland for years to come.

70. Executive competence for Carer’s Allowance transferred to the Scottish Government on 1 September 2018, and for Attendance Allowance, Disability Living Allowance, Personal Independence Payment, Industrial Injuries Disablement Benefit, and Severe Disablement Allowance on 1 April 2020. The Department for Work and Pensions (DWP) continues to administer these benefits through Agency Agreements on behalf of Scottish Ministers, while Scottish benefits are launched and cases transferred from DWP. For 2022-23, Social Security Scotland has budgeted that £62 million for Agency Agreements. The Agency Agreement costs the Scottish Government accepts from the DWP are scrutinised to ensure validity, consistency and compliance with jointly agreed inclusions and exclusions. Agency Agreement costs will reduce over time as Social Security Scotland administers new Scottish benefits replacing the DWP benefits.

71. The Scottish Government funds implementation costs incurred by the UK Government as a result of the devolution of welfare powers. For 2022-23 the PBC includes a forecast of £14 million for implementation recharges.

The Social Security (Scotland) Act 2018

72. The over-arching framework for use of the Scottish Government’s Social Security powers is set out in the Social Security (Scotland) Act 2018. The rules relating to individual benefits are set out in regulations made under enabling powers in the 2018 Act. In 2022-23 regulations have been made covering the introduction of Winter Heating Payment, extension of Scottish Child Payment and for case transfer from working age Disability Living Allowance to Adult Disability Payment. In addition, regulations were amended relating to Best Start Foods, Best Start Grant and Child Winter Heating Assistance, as well as the annual legislation relating to the uprating of devolved benefits.

Social Security Scotland

73. Social Security Scotland was established to deliver on the Scottish Minister’s obligations under the 2018 Act and the Agency delivers its services in accordance with the eight principles set out in the Act and a Social Security Charter. The Agency is founded on the values of treating people with dignity, fairness and respect.

74. In November 2022 Social Security Scotland published its annual Client Survey, covering the period from March 2021 to April 2022, which showed that people continue to have a very positive experience of Social Security Scotland. 89% of people responding to the survey said their overall experience was ‘very good’ or ‘good’; and 94% of people who had been in touch with a member of staff at Social Security Scotland reported that they had been treated with kindness.

75. Social Security Scotland recruited extensively over 2021 and 2022 to support the delivery of existing benefits and planned service growth, delivering on the First Minister’s pledge in September 2021 to create 2,000 new jobs over the following 12 months. As of 31 December 2022 the Agency directly employed over 3,800 Full Time Equivalent staff across its various sites. It delivered over £4 billion of benefit payments in 2022-23; £3.4 billion through Agency Agreements and around £0.6 billion directly. Further details of this spending will be provided in Social Security Scotland’s Annual Report and Accounts for 2022-23, which will be published in October 2023, in accordance with statutory timescales.

76. With the launch of Winter Heating Payment in February 2023, Social Security Scotland’s service has now expanded to thirteen separate benefit payments, seven of which are entirely new forms of financial support available only in Scotland. Social Security Scotland will continue to build capacity and capability with a focus on efficiency in 2023-24 as it prepares for the launch of the remaining Scottish Government benefits, including beginning to roll out Carer Support Payment by the end of 2023.

Benefits Launched

Adult Disability Payment

77. Adult Disability Payment (ADP) is the Scottish Government replacement for Personal Independence Payment. Our new, person-centred decision making process is intended to ensure everyone is treated with dignity, fairness and respect. Following a phased pilot rollout, which began on 21 March 2022, Adult Disability Payment opened for new applications in all areas across Scotland on 29 August 2022. This benefit will support an estimated 414,000 people in 2023-24.

78. As of 31 January 2023, 23,660 people were in receipt of Adult Disability Payment. Between 21 March 2022 and 31 January 2023, the total value of payments issued was £33.3 million.

Scottish Child Payment

79. We have invested £226 million in 2022-23 in Scottish Child Payment – the most ambitious child poverty reduction measure in the UK. In April 2022 the value of Scottish Child Payment was doubled to £20. On 14 November 2022 this payment was further increased to £25 per eligible child, per week, and extended to eligible children up to under the age of 16 in Scotland.

80. This increased and extended payment could lift 50,000 children out of poverty, reducing overall child poverty by an estimated 5 percentage points in 2023-24. In 2023-24 the Scottish Fiscal Commission forecasts up to 338,000 children to be in receipt of Scottish Child Payment and benefit expenditure to reach up to £442 million.

81. We know that having to apply for benefits can be a barrier and prevent some families from accessing the support they are entitled to. That is why on 28 November 2022 we began to award Best Start Grant Early Learning Payment and School Age Payment automatically to eligible families in receipt of Scottish Child Payment, without the need to apply. Taking this action not only makes it easier for families but also helps us to maximise take-up and is expected to help reduce processing times.

82. Together with Best Start Grant and Best Start Foods, Scottish Child Payment will provide a package of financial support worth over £20,000 by the time an eligible family’s first child turns sixteen.

Winter Heating Payment

83. Our new Winter Heating Payment was launched in February 2023 and replaces the UK Government’s Cold Weather Payment providing stable, reliable annual support to around 400,000 low-income individuals with their heating expenses each winter. In winter 2022-23 the payment was £50. This will be increased in winter 2023-24 by 10.1%, to £55.05, to recognise the significant impact the cost of living crisis is having on these households. Payments started in February 2023 and were made automatically to eligible households throughout February and March.

84. We consulted between December 2021 and February 2022 on the proposed Winter Heating Payment policy. The consultation responses showed broad support for the introduction of Winter Heating Payment. Removing the cold spell requirement to provide a stable, reliable benefit has been welcomed by people with lived experience of the benefits system.

85. This benefit is an investment of more than £20 million each year (£23.6 million in 2023-24). For the majority of people, our payment will provide more support than they have received on average previously through the UK Government benefit.

Case Transfer

86. A joint project between the DWP and the Scottish Government will see the disability and carer benefit awards of around 700,000 Scottish clients transferred to Social Security Scotland and onto new Scottish forms of assistance.

87. We began transferring the awards of approximately 48,000 children and young people from Disability Living Allowance for children to Child Disability Payment on 11 October 2021. As of 31 December 2022, 41,370 children and young people were in receipt of Child Disability Payment as a result of our successful case transfer process. We aim to have the transfer process completed for over 99% of those in receipt of Disability Living Allowance for children in Spring 2023.

88. We began natural case transfer for Personal Independence Payment, following a successful pilot, and for Working Age Adult Disability Living Allowance awards when Adult Disability Payment launched nationally on 29 August 2022. Under the natural case transfer processes, people’s awards are being selected for transfer where they report a relevant change of circumstances or when their award is due to be reviewed or come to an end. As of 31 January 2023, 12,010 people were in receipt of Adult Disability Payment as a result of our successful natural case transfer processes. A process of managed case transfer for all other people in receipt of Personal Independence Payment will begin in late Spring 2023.

Scottish Government policy development and implementation

89. During the reporting period we have launched Adult Disability Payment and Winter Heating Payment as well as extended Scottish Child Payment to under 16s and increased its value to £25, while continuing to develop systems and capability to support delivery of the remainder of the devolved benefits outlined in the Social Security (Scotland) Act 2018.

90. The Scottish Government also uprated all Scottish social security payments by 10.1% in April 2023 (except Scottish Child Payment which had already been uprated). This uprating included payments where this is a statutory requirement, as well as those where uprating is discretionary, in recognition of the difficulties being faced by many due to the increased cost of living. Scottish Child Payment was increased by 25% in November 2022 thereby bringing forward its uprating by four months and increasing its rate above inflation.

91. Further work on benefit delivery is also underway, including to commence roll out of Carer Support Payment with a pilot by the end of 2023, an independent review of Adult Disability Payment and continuing work with DWP to deliver the remaining Scottish Government benefits.

92. We are working towards national delivery of Carer Support Payment, our replacement for Carer’s Allowance, by spring 2024, with roll out beginning with a pilot from the end of 2023, ensuring that it works better for the people of Scotland. Carer Support Payment will provide an improved service, designed with carers to meet their needs, and in line with our principles of fairness, dignity and respect. Our consultation on the benefit ran from February until May 2022, and we published our response on 27 March 2023, setting out our plans for Carer Support Payment from launch and future improvements. We are continuing to work with DWP to develop the processes needed to set up the benefit and start to transfer carers’ benefits from Carer’s Allowance.

93. Adult Disability Payment is now available across all of Scotland. We are committed to an independent review of Adult Disability Payment, commencing in autumn 2023, a year after national launch. A consultation about the eligibility criteria for the mobility component of ADP has recently closed and the findings will be published for the independent review to consider later in 2023.

94. Pension Age Disability Payment will replace Attendance Allowance, a benefit for people aged over state retirement age, with a pilot beginning from Autumn 2024. Attendance Allowance is awarded to help with extra costs if a disabled person needs someone to look after them. It is the Scottish Government’s intention to provide this form of assistance for the same purpose – to mitigate costs associated with care needed as a result of being disabled.

95. Employment Injury Assistance (EIA), which replaces the UK Government’s Industrial Injuries Scheme, will be one of the most complex disability benefits to deliver. In the next few months we intend to consult on the subject of EIA and the replacement of the current UK Government Industrial Injuries Disablement Benefits. The consultation will consider a range of issues relating to the delivery and administration of EIA.



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