Welfare reforms and child poverty

A new report estimates 70,000 people in Scotland, including 30,000 children, would be lifted out of poverty by 2024 if UK Government welfare reforms introduced since 2015 were reversed.

The cost of reversing changes, including the removal of the £20 per week Universal Credit uplift and the two child benefit cap would be around £780 million a year, according to estimates in the Scottish Government’s Welfare Reform - Impact on Families with Children report.

Last month the Scottish Government published its second Tackling Child Poverty Delivery Plan – Best Start, Bright Futures – which sets out immediate and longer term actions to support people out of poverty and to tackle its deep-seated causes.

Social Justice Secretary Shona Robison said:

“Tackling child poverty is our national mission and we are helping to lift thousands of children out of poverty in Scotland within our limited powers. This report lays bare the cost of repeated UK Government welfare reforms since 2015 and the challenge we face in lifting children and families out of poverty for good.

“We are determined to tackle the cost of living crisis and we’re already helping to lift thousands of children out of poverty. We invested almost £6 billion from 2018-21 to support low income households, including around £2.18 billion to directly support children. We are also taking steps to mitigate the impact of the UK Government’s bedroom tax and benefit cap as fully as we can within our limited powers.

“We have introduced a package of five family benefits, including the Scottish Child Payment that we will raise to £25 a week by the end of 2022. We are also investing in employment support for parents, through new skills and training opportunities and key worker support to help reduce household costs and drive longer term change.”

Background

Welfare Reform - Impact on Families with Children report

Best Start, Bright Futures: tackling child poverty delivery plan 2022 to 2026

The study found:

• Reversing key UK Government welfare reforms that have occurred since 2015 would bring an estimated 70,000 people out of poverty in Scotland, including 30,000 children, in 2023-24.
• The total cost of reversing these reforms would be around £780 million per annum, including £50 million in increased expenditure on existing benefits provided by the Scottish Government such as the Scottish Child Payment and Discretionary Housing Payments, as a result of increased eligibility for these benefits.
• Reversing the reforms would increase disposable income for households with children with the lowest 10% of incomes by around 11%, and for households in poverty with children by 10%.
• Reversing each of the removal of the £20 uplift, the benefit freeze, or the two-child limit and removal of the family element,  in isolation, would bring around 10,000 children out of poverty: Of the reforms modelled, the most cost-effective way to reduce child poverty would be to reverse the two-child limit and the removal of the family element at a cost of £120 million.

The Scottish Government has published a series of reports on the impacts of UK Government welfare reform in Scotland since 2014.

The modelling used in this Welfare reform report uses the same microsimulation model, UKMOD, as the analysis supporting the Cumulative Impact Assessment which was published alongside the Tackling Child Poverty Delivery Plan 2022-26.