Social security assistance - effects of inflation: report

2. Background

2.1 In February 2019, the Scottish Parliament debated for the first time the inflation measure for uprating Carer's Allowance and Carer's Allowance Supplement.^[5],[6] It was then agreed by the Cabinet Secretary for Social Security and Older People that the Scottish Government would prepare a comprehensive report, including analytical evidence, on the measures that could be used to uprate devolved social security assistance. This report would subsequently allow the Social Security Committee and the Scottish Commission on Social Security to engage with the uprating policy prior to the laying of the uprating legislation in the future.

2.2 As uprating regulations will be laid before the Scottish Parliament for the first time under the Act for uprating in 2020-21, it is important to establish the policy on uprating going forward. The Analytical Report was prepared to provide a detailed review of relevant inflation measures to inform the options available to Scottish Ministers for uprating devolved social security assistance. A Policy Paper was also prepared which sets out the Scottish Government's proposed approach to uprating social security assistance.

2.3 The Policy Paper recommended that the September Consumer Price Index (CPI) rate is used for uprating devolved social security assistance in the short-term, with the assistance payment rounded to the nearest five pence.

2.4 Both the Policy Paper and Analytical Report^[7] were provided to the Social Security Committee and the Scottish Commission on Social Security on 2 September 2019.

2.5 Overall, the Scottish Commission on Social Security is supportive of the Scottish Government's uprating policy of using September CPI rate to uprate social security assistance at least in the short-term. The Scottish Commission on Social Security has set out recommendations^[8] for the Scottish Government approach to benefit uprating in terms of the significance of Social Security principles and human rights, the shorter-term and the longer-term approach to uprating. The Scottish Government has responded^[9] to these recommendations and will keep the recommendations under consideration to inform the development of future reports as more forms of assistance are introduced and reported on.

2.6 The Social Security Committee has also noted the Scottish Government's position on uprating of devolved assistance and has no further views to report beyond the discussion at the Committee on 10 October 2019^[10].

2.7 The following sections provide a detailed discussion of how the inflation-adjusted levels of assistance were calculated, what the inflation-adjusted levels of assistance would be and what the Scottish Ministers intend to do.