Scottish Child Payment: position paper - June 2019

Introduction

The Scottish Government has announced it will introduce a new benefit for low income families to reduce levels of child poverty in Scotland.

The Scottish Child Payment will be made to children under the age of 6 before the end of this parliamentary term (March 2021); and to all eligible children aged under 16 by the end of 2022.

The Scottish Child Payment will be administered by Social Security Scotland through an application-based process; and will be a payment for each eligible child in the family; and will be paid on a monthly basis.

This paper sets out the process of development of the Scottish Child Payment and the expected policy impacts it will have. It has been published alongside both the Tackling Child Poverty Delivery Plan – First Year Progress Report 2018-19 and Analysis of Options for the Income Supplement- a detailed analytical paper that shows the consideration given to a wider set of policy options.

Tackling child poverty in Scotland

The Scottish Government is ambitious for Scotland's children, and does not believe that poverty is inevitable. We want to ensure that children have the best start in life and have access to a full range of opportunities as they grow up. We want to help parents who are looking to move back into the workplace and, for those already in work to access better-paid jobs and greater security in which to bring up their families. We also want to take further action to tackle the deep-seated inequalities in our society.

To support these aspirations, the Child Poverty (Scotland) Bill passed unanimously in the Scottish Parliament in November 2017. The Act sets four income based targets to reduce child poverty to be met in an interim period (2023/24), with final targets in 2030/31. They are shown in the table below, along with current rates of child poverty. All these are measured on an 'after housing costs' basis.

Table 1 - Child Poverty Targets

The role of social security

Every Child Every Chance, the first Tackling Child Poverty Delivery Plan (TCPDP) was clear that, while social security was important in meeting the targets, it could not secure the targets on its own. This view is supported by the independent Poverty and Inequality Commission based on research undertaken by think-tank IPPR Scotland. Their advice to the Scottish Government made clear that "…reaching targets through devolved social security alone is not realistic and would require billions of pounds of additionalspending".^[1]

The most recent child poverty statistics show that the majority of children living in poverty in Scotland are in a household where at least one adult is in paid employment. Only around 1 in 10 children live in a household where all adults are unemployed.

As advised by the Poverty and Inequality Commission, our TCPDP recognises that sustainable, fair work is a long term route out of poverty, and takes a number of actions in this area to improve employment opportunities and earnings, including for those who are currently not in work.

Given the key role of social security, the TCPDP included a commitment to work towards introducing a new income supplement for low income families who need it most within the lifetime of the plan (2018-2022); and that it would take appropriate steps to ensure that it met two tests:

• It is targeted on those families who need it, and that it's therefore helping to lift the maximum number of children out of poverty.
• There is a robust and viable delivery route to get it to families, and that the delivery costs are reasonable – ensuring we maximise the resources available.

Since the publication of the TCPDP, significant work has been undertaken to develop the income supplement, now called the Scottish Child Payment, alongside the clear government priority placed on ensuring the safe and secure delivery of the benefits devolved under the Scotland Act 2016.