Low Income Winter Heating Assistance: consultation analysis

3. Qualifying benefits

This chapter presents an analysis of Q12, Q14 and Q16 which cover the use of qualifying benefits and the clarity of the eligibility criteria for LIWHA. The Scottish Government does not intend to make significant changes to the qualifying benefits i.e. people who meet the existing qualifying criteria for CWPs should be eligible for a LIWHA payment^[2].

Q11. Do you agree or disagree that our approach to identifying eligibility should be through the use of qualifying benefits?

Q12. If you disagreed, please could you explain why?

Just under two thirds of respondents (64%) agreed with the proposal to use qualifying benefits to identify eligibility for LIWHA. A quarter (25%) disagreed and 9% were unsure. A greater proportion of organisations agreed with the proposal, compared to individuals (81% vs 57%). Open-ended comments were provided by 46 respondents. Some respondents' comments under Q14 and Q16 are more relevant to the themes covered under Q12; these have therefore been included in the analysis below.

Concern that qualifying benefits exclude some low income households

The most prevalent issue identified by the minority of respondents who disagreed with this aspect of the proposal was recognition that not all people on a low income receive state benefits. This created concern that using qualifying benefits to determine eligibility for LIWHA could exclude some people who need financial support.

Some noted how many experiencing in-work poverty would miss out on LIWHA, and suggested there was scope to identify and extend the payment to these households. Others discussed how some pensioners would be ineligible due to not qualifying for Pension Credit, despite having a relatively low income.

A few noted that a small sum of money (i.e. a few pounds) can be the difference between being eligible for a benefit or not. This may result in households with an income just above the threshold for some benefits who will not be entitled to LIWHA, despite having a similar income to those who are eligible. There were also concerns that low income households without children would be unable to access the assistance.

"Low income is experienced by a broader population than the current criteria includes." – Individual

"Many households are on the brink of balancing income and expenditure, but do not qualify for any benefits. However, a LIWHA could help massively." – Individual

Some respondents felt that the proposed eligibility criteria do not reflect the significant increase in fuel costs which will put more households at risk of fuel poverty despite not being eligible for the qualifying benefits.

"As fuel costs rise, heating the home will become tougher for everyone and especially those on the cusp of what might be considered medium incomes will move below that threshold without necessarily becoming a low income household and/or receiver of benefits." – Individual

Several respondents also raised the issue of unclaimed benefits, noting that there are many households who do not claim all the social security that they are entitled to. This means they would not receive LIWHA, despite being in the same financial position as those who claim the benefits. Respondents suggested more should be done to encourage and support these households to claim the benefits they are entitled to. This issue was also raised by participants at the stakeholder event.

"Whilst we support the approach to identifying eligibility through the use of pre-existing reserved benefits, mainly that of Pension Credit, we are equally concerned that this benefit is one of the most underclaimed social security payments with an estimated 40% of eligible pensioners missing out. Research by Independent Age has estimated there are 123,000 eligible households in Scotland who are not claiming Pension Credit. We believe that this is a fundamental issue that must be addressed if the LIWHA is to reach its full potential in supporting low income households experiencing fuel poverty. The Scottish Government should therefore seek to increase awareness of Pension Credit and support people to claim it, giving them access to the LIWHA payment." – Age Scotland

Need for flexible approach

Some respondents' support for the approach of using qualifying benefits was conditional on integrating an element of flexibility and discretion into the process. They requested that personal circumstances be taken into account if people do not automatically qualify for the assistance. For example, there may be claimants whose benefits have been sanctioned or are in dispute/awaiting appeal; others may be waiting on medical assessments to determine their eligibility; some people may have been experiencing financial abuse at the hands of a partner and do not have access to/control over their finances. In cases such as these, they suggested LIWHA should be awarded despite the individual not being in receipt of the qualifying benefits. Christians Against Poverty raised the specific issue of asylum seekers and those without indefinite leave to remain, who are expected to pay bill including heating, but have no legal recourse to benefits.

A small number argued that there should be scope for households who do not automatically qualify to apply for the assistance.

"We do however think that proposal should address the fact that people who are in fuel poverty are not always eligible for benefits and therefore suggest that in addition to these qualifying benefits which result in automatic qualification, provision is also made for households that are not in receipt of DWP benefits to apply for the LIWHA – specifically those on low income, with high fuel costs, and who are vulnerable, including to cold related illness." – Energy Saving Trust

"Although we welcome the targeted nature of this fund, the Cystic Fibrosis Trust would like to see the addition of a built-in mechanism for applications in exceptional circumstances, for those who fall outside of the [eligibility] criteria. Additionally, this could act as a failsafe for those who fall outside of the "qualifying week" proposed" – Cystic Fibrosis Trust

Alternative approaches to identifying eligibility

Respondents suggested other ways to determine eligibility for LIWHA. These included:

• Basing it on household income (for example, one respondent suggested those on a household income of less than £25,000 should be eligible) or income tax.
• Widening access so that all vulnerable households are eligible for the assistance (e.g. elderly households and people with disabilities or long term health conditions and their carers). For example, Cystic Fibrosis Trust proposed automatic qualification for LIWHA for people with a long-term health condition or disability.
• Taking into account the condition/heating efficiency of a property (e.g. state of disrepair, insulation) and the affordability of/relative spend on heating (e.g. percentage of income spent on heating bills).
• Incorporating eligibility criteria from the Scottish Government's Best Start Grant into the LIWHA so that parents on a low income who are not in receipt of the qualifying benefits can access the grant.
• Inclusion Scotland suggested that anyone entitled to support when LIWHA payments are being made should receive the benefit.

A small number felt that the LIWHA should not be means tested at all and that all households in Scotland should be eligible for the payment. One suggested that a universal winter heating payment should be allocated and then reclaimed back from high-income households via a tax return.

Glasgow City Council highlighted that the Department of Work and Pensions (DWP), not the Scottish Government, determine eligibility for some of the benefits upon which LIWHA eligibility is based. This means that if DWP changes the benefit criteria, it would consequently impact entitlement to LIWHA.

Support for proposed approach

Several respondents explained why they agreed with using qualifying benefits to determine eligibility for the LIWHA. They noted that this approach is a relatively clear and simple way to identify those who will benefit most from the scheme and will make it easier for the Scottish Government to plan and budget for the allowance. More specifically:

• Citizens Advice Scotland noted that using qualifying benefits is in line with the Scottish Government's approach to other heating support for low income households.
• Energy Saving Trust welcomed the inclusion of benefits relating to disability and age as this recognises the greater need for heating in such households.
• Child Poverty Action Group in Scotland noted that LIWHA allows the Scottish Government to make payments to some income households, and that the legislation and technical framework could be developed to ensure it can be used to make additional payments to this group of low income households in the future.

Q13. Do you agree or disagree with the proposal to retain the current qualifying benefits to indicate eligibility for this new payment?

Q14. If you disagreed, please could you explain why?

Half of respondents (50%) agreed with keeping the current qualifying benefits to determine eligibility for LIWHA. Over a quarter (28%) disagreed and 18% were unsure. Opinion among organisations was mixed – 56% agreed, 31% disagreed and 8% were unsure. Among individuals, 48% agreed, 27% disagreed and 23% were unsure.

While 50 respondents gave an open-text response to Q14, many of these comments were more relevant to the themes covered under Q12, and were included in that analysis. Responses which directly addressed the current list of qualifying benefits is presented in this section of analysis.

Expanding the list of qualifying benefits

The most prevalent need identified by respondents who disagreed with this aspect of the proposal was the requirement to add other benefits to the list of qualifying benefits. Several respondents suggested Personal Independence Payment (PIP) and Disability Living Allowance (DLA) should be included in the list of qualifying benefits.

Many felt strongly about this, referencing studies that show disabled people and those with long-term health conditions face higher energy bills. They highlighted that disabled people experience higher rates of unemployment than those without disabilities and are likely to spend more time at home; and their conditions or impairments make them more susceptible to ill health if their homes are cold. Respondents felt it important to include PIP and DLA as qualifying benefits, as many disabled people do not claim any other qualifying benefits, but would benefit greatly from LIWHA.

"Our Experts by Experience Panel believe that there is a strong case for extending entitlement to households containing recipients of Child or Adult Disability Payments regardless of whether they claim means tested benefits. This is because such households are not only at greater risk of poverty but very often also face higher energy costs (e.g. disabled adults are more likely to be workless and spend more time at home during the day whilst some disabled children (and adults) face extra laundry costs due to incontinence etc.) Research by the disability charity Scope suggests that disabled people in Scotland face the highest additional monthly costs due to disability (on average £632 extra per month in 2018 - partly due to higher average energy costs). Thus extending entitlement to more disabled adults and children would be a well targeted intervention." - Poverty & Inequality Commission for Scotland

Other forms of social security that respondents felt should be added to the list of qualifying benefits, each mentioned by a small number of consultation participants, included:

• Housing benefit, Council tax reduction, Scottish Child Payment or Attendance Allowance
• Any contribution-based benefits, e.g. Employment and Support Allowance (ESA).
• Carer's Allowance, Young Carer Grant, the carer element of Universal Credit or carer premium on legacy benefits.

One respondent suggested that the list should be expanded so that anyone on a means-tested benefit is eligible for LIWHA.

Amendments to eligibility criteria

A few argued that the additional qualifying criteria for some of the low income benefits should be removed, particularly those around Universal Credit. They disagreed with the inclusion of criteria that excludes employed claimants and claimants without a child under 5 years of age in their household. It was noted that this will prevent many people in in-work poverty and single people from accessing the assistance, despite having few other avenues of financial support from the state.

"We agree in part with the proposed eligibility however we would remove the exclusionary criteria that states that you must not be in employment when claiming Universal Credit to eliminate a level of confusion. This may help to prevent the exclusion of households who need the support despite being employed, particularly people working a small number of hours per week or with fluctuating wages." – Poverty Alliance

Support for retaining current qualifying benefits

Some respondents supported the retention of current qualifying benefits, noting that in the majority of cases, they will capture low income households experiencing fuel poverty. One provisionally supported the list of qualifying benefits, but thought it was important to revisit the list in the future to ensure that the assistance is well targeted and those who require additional assistance with the fuel costs during the winter period are not excluded.

Q15. Do you agree or disagree that the eligibility criteria for the LIWHA are clear?

Q16. If you disagreed, please could you explain why?

The majority of respondents (60%) agreed that the eligibility criteria for LIWHA are clear. Few disagreed (13%) and nearly a quarter (24%) were unsure. Organisations were more likely to agree than individuals (78% and 52% respectively). There were 21 comments in response to Q16. Approximately half of these aligned with the themes covered under Q12 and Q14 and have been included in the analysis of those questions. This section presents an analysis of responses addressing the clarity of the eligibility criteria.

Complex eligibility criteria

Complexity was the prevalent issue among those who left comments. The criteria was described as 'unclear', 'complex' and in need of simplification by a few respondents, although few provided any suggestions for improvements. Specifically:

• Two respondents raised concerns that the use of disability premiums in the eligibility criteria added a layer of complexity and called for this to be simplified.
• One drew attention to the 'confusing' criteria around Universal Credit.
• One suggested changing the criteria to include anyone in receipt of means-tested benefits to make it more universally understandable.

A small number of individuals stated that they did not know what the proposed eligibility criteria was, and therefore it was unclear. It is not known if this is because they did not understand what was in the consultation paper or because they had not read it.

Citizen's Advice Scotland noted that while the criteria is complicated, they recognise that a degree of complexity is required in order to identify those most in need of the assistance.

"CAS recognises that in targeting support to the most vulnerable low income consumers, an element of complexity within eligibility criteria is inevitable; the nature of the reserved benefits system means that a mixture of proxies must be used to ensure that vulnerable low income households are treated equally, regardless of the principal means tested benefit they receive. We agree that the devolved replacement for CWPs should continue to focus its support on the most vulnerable low income consumers and we therefore believe that the eligibility criteria proposed by the Scottish Government are as clear as they reasonably can be in the circumstances." – Citizen's Advice Scotland

Language used

One respondent claimed that 'unclear jargon' was used in the eligibility criteria, but did not specify which words, phrases or sections they were referring to.