Carer Support Payment: business and regulatory impact assessment

Options

Option 1 - Do Nothing:

The Scottish Government could take a ‘do nothing’ approach to the introduction of Carer Support Payment.

The transfer of powers to Scotland to make provision for Carer Support Payment is set out in the Scotland Act 2016 and Social Security (Scotland) Act 2018. Therefore, not taking over powers from the DWP was not considered to be a viable option.

If the DWP were to stop making Carer’s Allowance payments to Scottish clients and the Scottish Government did not provide a benefit to replace this provision, then over 83,000^[30] carers entitled to Carer’s Allowance would be worse off as they would no longer receive a payment. Carers with ‘underlying entitlement’ to Carer’s Allowance may also lose out on additional support provided in other benefits in recognition of their caring role. As noted previously, this number is forecast to increase over time. Therefore, not taking over powers from the DWP was not considered to be a viable option as carers would lose out on essential support.

Benefits: There are not expected to be any benefits to this option.

Option 2 - Introduce Carer Support Payment on same basis as current DWP provision:

If Carer Support Payment were to reflect current DWP provision, it is not considered that this would be in line with our social security principles, or consistent with how our existing benefits are delivered. Social Security Scotland ensures that the principles of dignity, fairness and respect are at the heart of its work. Of particular importance is the principle that 'social security is a human right, essential to the realisation of other human rights'. The Scottish Government committed to a rights-based approach at the heart of everything it does; from policy development and service design, all the way through to the delivery of benefits, the way that agency staff are recruited and trained, and the interaction between staff and the people who use the new service^[31].

While Carer Support Payment will broadly mirror Carer’s Allowance when it first launches to protect the safe and secure transfer of benefits for carers in Scotland who are already receiving Carer’s Allowance and to avoid creating a ‘two-tier system’ where people are treated differently between the two benefits, there are a number of changes which can be made from launch to improve how carers are supported. Carer Support Payment will deliver an improved service from launch, designed with carer and support organisations and in line with our aim to ensure carers have a positive experience of the social security system, and providing links to wider services to help carers access all the support to which they are entitled. This will include a reduced past presence test so that carers can access support more quickly, and changes to the rules on receiving the benefit while in full-time education which will allow more carers can study and continue to receive support. In line with the devolved disability benefits we will also take a different approach from Carer’s Allowance in terms of re-determinations and appeals processes and providing clear timescales for these to be undertaken in.

Benefits: There are not expected to be any particular benefits to the option of introducing Carer Support Payment on exactly the same basis as Carer’s Allowance, for the reasons set out above. However, we appreciate that replicating exactly how Carer’s Allowance works now may be clearer initially for existing benefit recipients, welfare advisors and wider organisations working with carers and the people they care for, and would avoid a short period where eligibility will differ within Scotland during the pilot phase of delivery. In general, Carer Support Payment will mirror current Carer’s Allowance eligibility and rules to support safe and secure transfer of benefits for existing clients and avoid differential treatment. In addition, certain elements of the existing Carer’s Allowance benefit have been maintained that are viewed positively by existing recipients, for example the trust-based approach applications, where carers self-report caring hours.

Option 3: Introduce Carer Support Payment (recommended option):

Proposed: The Scottish Government proposes the introduction of Carer Support Payment and the safe and secure transfer of clients in receipt of Carer’s Allowance in Scotland, onto Carer Support Payment.

The Scottish Government will make first payments of Carer Support Payment when it launches a pilot in winter 2023, with phased rollout from spring 2024 incorporating all the improvements set out previously. The Scottish Government will transfer entitlement of clients in receipt of Carer’s Allowance in Scotland, safely and securely, in line with its published case transfer principles.

Sectors and groups affected:

The impact of Carer Support Payment and the case transfer process is going to be dispersed across the country and sectors of the economy. The Scottish Fiscal Commission’s forecast for Carer Support Payment published in May 2023 and revised in June 2023^[32] included a formal forecast for Carer Support Payment for the first time, estimating expenditure of £486 million in 2024-25 (including Carer’s Allowance Supplement), rising to £615 million in 2027-28 (including both Carer’s Allowance Supplement and the planned Carer’s Additional Person Payment).

As noted previously, there may be some potential impacts on welfare advice and support services, however we plan to mitigate this through our ongoing engagement with carer stakeholder organisations, and by providing stakeholders with clear information and communications around any changes to support.

An information sharing process will also be in place between the Scottish Government and external stakeholders – including the Department for Work and Pensions (DWP) the Ministry of Defence (MoD), His Majesty’s Revenue and Customs (HMRC) and Local Authorities – to ensure all communications between departments is as seamless as possible and to support with the overall transition from Carer’s Allowance to Carer Support Payment in Scotland.

Department for Work and Pensions

The Scottish Government and the DWP will share data with each other to support delivery of Carer Support Payment. This data sharing arrangement is required to assess eligibility for support, ensure accurate determination on cases are made and to ensure that clients’ receipt of Carer Support Payment affects awards of DWP income-related benefits in the right way, and that receipt of DWP income replacement benefits affects Carer Support Payment in the right way.

Ministry of Defence

The Scottish Government and the MoD will share data with each other to support delivery of qualifying benefits. This data sharing arrangement is required to assess eligibility for support, and prevent double payment where clients are entitled to both Carer Support Payment and any ‘overlapping benefits’ administered on behalf of the MoD.

HMRC

The Scottish Government will share award data with HMRC for HMRC to ensure that carers receive the right amount of National Insurance credits and can be treated appropriately in relation to eligibility for other HMRC support such as Tax Credits and Tax-Free Childcare. The Scottish Government will also retrieve earnings data from HMRC on Carer Support Payment clients who are in employment to support assessment of the earnings of clients to apply the Carer Support Payment eligibility criteria.

Local authorities

The Scottish Government will share award data with Local Authorities to ensure the client receives appropriate support from the local authority areas in which they reside. This includes council tax reduction and changes to housing benefits.

Regulatory and EU Alignment Impacts

Intra-UK Trade

The introduction of Carer Support Payment is not expected to have impacts on intra-UK trade. However, it is worth noting that carers would not be able to receive Carer Support Payment if they are living outside of Scotland but elsewhere in the UK. People living elsewhere in the UK will get Carer’s Allowance even if they have links to Scotland. This would include carers living in England and caring for someone who lives in Scotland. People who are receiving Carer Support Payment who move from Scotland to the rest of the UK can be paid a 13-week run on of Carer Support Payment to prevent gaps in support while they apply for Carer’s Allowance elsewhere in the UK.

International Trade

The introduction of Carer Support Payment is not expected to have impacts on international trade and investment. However, it is worth noting that the same rules around ‘exportability’ – eligibility to receive support outside the UK – are expected to apply for Carer Support Payment as they do for Child and Adult Disability Payments which are also provided by Social Security Scotland, and to Carer’s Allowance. Carer Support Payment would need to be classified by the EU Administrative Commission as a cash sickness benefit for it to be exportable. This would mean that some carers may be able to receive Carer Support Payment outside of the UK if they are living in the European Economic Area, Switzerland, or Gibraltar, and they have a ‘genuine and sufficient link’ to Scotland^[33]. They would need to be covered by agreements the UK Government has made with the European Union, Ireland, or Gibraltar^[34]. To be covered by the European Union agreement, carers from the UK would need to have been living outside of the UK since before the UK left the European Union on the 1st of January 2021. This is to be agreed with the EU Admin Commission.

Carers may also receive support outside of the UK if they are a civil servant, serving member of the armed forces, aircraft worker, mariner or continental shelf worker, or their family member. In these cases, Carer Support Payment would continue to be paid by Social Security Scotland.

EU Alignment

The introduction of Carer Support Payment is not expected to have any impacts on the Scottish Government’s policy to maintain alignment with the EU though the same exportability rules outlined above are expected to apply.