Scotland's social security system: enhanced administration and compensation recovery - consultation

Impact assessments

An Impact Assessment is an evidence-based process used by the Scottish Government during the development of proposals to consider the possible effects and outcomes on people, businesses and communities. We undertake a range of Impact Assessments to allow us to consider the impacts our proposals will have on different groups of people, different communities and different businesses.

The Scottish Government created the National Performance Framework to explain our aims for Scotland, the values that guide our approach and the national outcomes we are committed to achieving. Undertaking impact assessments helps us to understand if our proposals align with our national outcomes. We can address any unintended consequences at an early stage and develop our proposals appropriately to mitigate any potential negative impacts.

In our work to develop policy for continuously improving Scotland's social security system we have considered how the decisions we make could affect different people and groups differently – using research and evidence we already have, and continuing to listen to clients and organisations who support them to find out more.

It is important that the social security system continues to develop, adapt and improve to continue to support those who require assistance. We also want to do what we can to improve equality through any changes and avoid any negative impacts on any people, groups, communities or businesses.

We would therefore like to use this consultation to take your views on any possible impacts the proposals may have in a number of areas that we may not have considered to date. A summary of what we have learned so far is provided below.

Equality Impact Assessment

The Scottish Government uses Equality Impact Assessments to help consider how a proposal could affect different groups differently when it is being developed, as well as thinking about how any proposed changes could be used to improve equality.

In developing the proposals we have set out in this document we looked at equality information to identify where changes could affect some groups more than others, either positively or negatively, and where there are opportunities to make changes which would improve equality.

We paid particular attention to groups of people with protected characteristics as identified in the Equality Act 2010. The protected characteristics covered are age, disability, gender reassignment, pregnancy or maternity, race, sex, sexual orientation and religion and belief.

The impacts that we have identified so far for each protected characteristic are:

Age

Social Security Scotland client diversity and equalities analysis to May 2021 shows that 93% of clients were between the ages of 16 and 44^[1].

This high proportion of younger people does not reflect the population of Scotland as a whole, but is probably due to the type of support provided by Social Security Scotland to that date.

The majority of applications were for Best Start Grant and Best Start Foods or Scottish Child Payment, and applicants for these benefits are likely to be younger people with dependent children under 6 years old. As more types of assistance, such as Adult Disability Payment, are rolled out by Social Security Scotland this distribution of age is likely to change.

The proposal to allow people to retain their DWP appointee for a limited time in the Scottish system would have a positive impact on the age characteristic. The increased prevalence of dementia in older people means that they are more likely to require an appointee than other people. Allowing these older people to retain their DWP appointee for a limited time would speed up the processing of their application. There are however risks that where someone is not an adult with incapacity, but has a DWP appointee in place, then the DWP appointee could have some control over the client's benefits for a short period and receive their money.

Disability

The proportion of Social Security Scotland applicants in the period to May 2021 who self-identified as having a physical or mental health condition or illness lasting or expected to last 12 months or more was 17%^[2].

Comparable nationwide data does not exist for Scotland as a whole but 31% of adults reported that they lived with a limiting long-term condition in August/ September 2020^[3]. This discrepancy could be in part due to the types of benefits administered by Social Security Scotland at this point in time.

Adult Disability Payment will be rolled out nationally across Scotland in Autumn 2022 and as such it is likely that there will be an increase in the proportion of people who have a disability making an application to Social Security Scotland for assistance.

We are aware that recovering assistance paid from compensation awards is likely to have a disproportionate impact on people who have a disability or serious injury.

People who have been injured in an accident can currently apply for disability assistance, whether devolved or reserved, or Industrial Injuries Disablement Benefit (IIDB). If a compensation settlement is reached for this accident then the proposal in this consultation is that the amount of any recoverable benefit will be repaid to Social Security Scotland by the compensator (usually an insurance company).

We do not foresee a negative impact of this proposal on people who have a disability as there is an existing system which already operates in the UK as a whole.

We know that people who are disabled and have children are more likely to be in poverty^[4] and therefore more likely to be affected by any changes to Scottish Child Payment. If we have more flexibility over the qualification criteria for Scottish Child Payment we could be more responsive to client and stakeholder feedback.

The proposal to retain DWP appointees for a limited time is likely to have a positive impact on people with a disability who already have a DWP appointee in place by speeding up the initial application process. The benefit of that positive impact is being considered against the risk of an unsuitable appointee receiving payment and controlling someone's award for a short period.

We recognise that the proposal to allow a new determination to be made after an appeal has been lodged could have a positive impact on people with a disability. DWP data shows that for initial decisions following a PIP assessment during April 2013 to September 2021 15% of appeals lodged saw DWP change the decision in the customer's favour before the appeal was heard at tribunal^[5]. This proposal could allow errors to be rectified more quickly and, if the appeal stopped, this could avoid unnecessary appeals proceeding to the Tribunal. This could reduce stress and anxiety for clients by removing the need to attend a Tribunal hearing.

We do not expect the proposals about overpayment liability to have any particular impact on people with a disability. A client's disability will not be a factor in whether they are found liable for an overpayment. When making a decision on overpayment liability, Social Security Scotland will consider whether the client could be reasonably expected to have noticed the error. The changes proposed in this consultation paper would legally allow liability to be placed on appointees or parents/guardians of children who make and administer applications on their behalf.

Sex

The latest mid-year estimates for Scotland published by National Records of Scotland show that 52% of the population aged 16 and over were female, and 48% were male^[6].

However, the proportion of Social Security Scotland applicants to May 2021 who self-identified as 'Man' (12%) were significantly lower than those who self-identified as 'Woman' (86%). A small proportion of applicants (less than 1%) self-identified 'In Another Way' and 3% of applicants selected 'prefer not to say'^[7].

The majority of equalities data for this period were from applicants for Scottish Child Payment or Best Start Grant or Best Start Foods, the high proportion of women applying for these benefits (89% and 90% respectively) had a disproportionate impact on the gender breakdown for clients as a whole.

In society, caring roles most typically fall to women^[8]. In addition to the figures above for Scottish Child Payment and Best Start assistance, 69% of people who receive Carers Allowance Supplement are women^[9].

Currently of the twelve benefits that Social Security Scotland deliver, seven relate to dependent children and two relate to caring responsibilities. When Social Security Scotland begins to administer more forms of assistance nationally, such as Adult Disability Payment, the gender split of clients is likely to change.

However, it seems likely that there will continue to be a difference between the gender breakdown of Social Security Scotland clients and the gender breakdown of the Scottish population.

The suite of proposals in this consultation paper aimed at improved client experience are intended to have a positive impact across Social Security Scotland clients. These proposals are likely to have a disproportionately positive impact on women due to the gender breakdown of Social Security Scotland clients.

Gender Reassignment

There is no robust data relating to the proportion of people in Scotland to whom the gender reassignment protected characteristic applies. Less than one percent of the clients who responded to the Social Security Scotland Equalities Monitoring and Feedback form to May 2021 self-identified as transgender and 4% chose 'prefer not to say'^[10].

Across all of the proposals presented in this consultation paper we are not aware of any impacts to people to whom the gender reassignment protected characteristic applies.

Sexual Orientation

The latest results from Scottish Surveys Core Questions show that around 3% of adults in Scotland self-identified as 'Lesbian, Gay, Bisexual or Other' in 2019^[11]. We have so far not identified any impacts on people to whom the sexual orientation protected characteristic applies.

Race

The proportion of Social Security Scotland clients self-identifying as belonging to a minority ethnic group is higher, at 8%^[12], than in the wider Scottish population at just under 5%^[13]. This suggests that any cross-cutting changes made to the Social Security Scotland system such as those described under the theme 'Improving Client Experience' in the consultation paper, will have a disproportionate impact on people to whom the race protected characteristic applies.

We also recognise that there are a higher proportion of children from a minority ethnic group in poverty, at 40% compared to 24% of all children^[14]. As a result certain minority ethnic groups are more likely to be eligible for Scottish Child Payment and therefore more likely to be impacted by any changes made in future.

Religion or Belief

We are aware that when adults in relative poverty are broken down by religion, statistics show that poverty impacts some religious groups more than others: 49% of Muslims, 19% of Roman Catholics, 19% of other Christian groups, compared to 18% of all adults^[15].

These statistics are reflected in that the proportion of Social Security Scotland clients self-identifying as Muslim (5%)^[16] is higher than that of Scotland as a whole (2%)^[17]. Given that some religious groups are more likely to be living in poverty, they are therefore more likely to apply to Social Security Scotland for one, some or all of the Five Family payments. As such these religious groups are more likely to be affected by any changes made to the Social Security Scotland system.

The suite of proposals described in this consultation paper aimed at improving client experience are intended to have a positive impact across all Social Security Scotland clients. There is likely to be a positive impact on the religious groups outlined above as a result of the proposals to improve client experience.

Pregnancy or Maternity

We know that people with the protected characteristic of pregnancy or maternity will be more likely to apply for Scottish Child Payment than other people as by definition it is assistance for people with children. Any changes made to the delivery of Scottish Child Payment will have a disproportionate impact on people with this protected characteristic.

We recognise that the proposal to retain DWP appointees for a short period could potentially speed up the application process for pregnant people applying for Best Start Grant, Best Start Foods or Scottish Child Payment. This would be a positive impact for this group of people. However this would mean that assistance could be paid where Social Security Scotland had not yet found the client to be incapable. The benefit of that positive impact is being considered against the risk of an unsuitable appointee receiving payment and controlling someone's award for a short period.

We do not expect the proposal about alternative options to prosecution in cases where there is evidence of low value fraudulent activity to have an impact on people with this protected characteristic. An individual's protected characteristics will not be a factor in whether an investigation proceeds rather it will depend on whether there is reasonable evidence that there is substance to an allegation. The values of dignity and respect are embedded within Social Security Scotland culture and all staff are required to undertake equality training to ensure all clients are treated with fairness and without discrimination.

We have so far not identified any specific impacts on groups who share protected characteristics brought by the remaining proposals about the independent advice and scrutiny of social security and COVID-19 measures.

Q39. Do you have any information you wish to share on the impact of the proposals on groups who share protected characteristics?

Please provide details, making reference to the specific proposal or proposals to which your comments relate.

Island Communities Impact Assessment

This impact assessment is about testing any new policy, strategy or service which is likely to have an effect on island communities which is significantly different from the effect on other communities.

We are aware that island stakeholders have emphasised the importance of policy makers understanding the island experience. Each island has its own specific considerations and constraints, and there are several factors which impact on island residents' daily lives compared to people who live on the Scottish mainland.

For the majority of the proposals described in this consultation paper we have not identified any island-specific impacts or barriers.

There could be a positive impact for people who live in remote island communities as a result of the proposal to retain DWP appointees for a short period. The Social Security Scotland appointee process requires a visit from a Local Delivery officer. There is a network of Local Delivery officers covering the islands but as more assistance is rolled out and more clients make applications to Social Security Scotland, it could take longer for clients living in island locations to receive a visit due to their location. By retaining a DWP appointee to act, we may prevent undue delay which would positively impact people living in island communities.

Q40. Do you have any information you wish to share on the impact of the proposals on Island communities?

Please provide details, making reference to the specific proposal or proposals to which your comments relate.

Fairer Scotland Duty

This is about considering how the decisions we make about future policy for Social Security Scotland can help to reduce the challenges that people can face as a result of 'socio-economic disadvantage' – which can be things such as having a low income, not having access to basic goods or services, or having a background which gives them fewer advantages.

The proposals in this consultation paper are aimed at effecting the continuous improvement of the Social Security system in Scotland. Social Security Scotland do not gather equalities information about clients' socio-economic background. However we recognise that the types of assistance offered by Social Security Scotland to people with dependent children, people with caring responsibilities and people with disabilities means that clients are more likely to be impacted by socio-economic disadvantage than the general Scottish population.

Currently people over the age of 18 must be in receipt of a qualifying UK benefit in order to receive any of the Five Family Payments (Scottish Child Payment, Best Start Foods, Best Start Grant: Pregnancy and Baby Payment, Best Start Grant: Early Learning Payment, Best Start Grant: School Age Payment).

This indicates that clients who receive the Five Family Payments have a low income which is considered a socio-economic disadvantage. Similarly people must be receiving Carer's Allowance in order to be eligible for Carer's Allowance Supplement, indicating a low income.

Disability related benefits delivered by Social Security Scotland such as Child Disability Payment and Adult Disability Payment are not income based but we are aware that studies show households where a household member is disabled are more likely to be living in poverty than households where no-one is disabled. Relative poverty rates are higher at 23% in households where a household member is disabled than in households were no-one is disabled (17%).

The importance of disability related benefits for households where a household member is disabled is clear as when these benefits are not considered the poverty gap increases to 29% of households with a disabled household member compared to 16% of households where no-one is disabled^[18].

The proposal to retain DWP appointees for a time limited period prevents clients with DWP appointees being left without resources while Social Security Scotland processes to appoint an appointee are followed. Given the importance of disability assistance to the income of these households, it is therefore vital to maintain continuity of payments where possible.

If we do not retain DWP appointees for a short period then any possible gaps in clients' assistance will need to be managed, while Social Security Scotland processes are followed and appointees appointed. This would cause these clients and their households hardship which could be avoided by using DWP appointee for a time limited period. The benefit of the positive impact is being considered against the risk of an unsuitable appointee receiving payment and controlling someone's award for a short period.

The purpose of the Scottish Child Payment is to reduce child poverty. The proposal to have more flexibility over the qualification criteria of Scottish Child Payment may give us greater opportunity to reduce inequality caused by socio-economic disadvantage.

We know that the early years are key to improving long term outcomes. While future options and policy aims remain to be consulted upon or decided, if there was additional flexibility over the rules governing Scottish Child Payment then the Scottish Government would have greater control over design, delivery and eligibility criteria.

Q41. Do you have any information you wish to share on the impact of the proposals on reducing inequality caused by socio-economic disadvantage?

Please provide details, making reference to the specific proposal or proposals to which your comments relate.

Child Rights and Wellbeing Impact Assessment

The Scottish Government is committed to ensuring that children's rights, as determined by the United Nations Convention on Rights of the Child, are recognised, respected and promoted.

A Child Rights and Wellbeing Impact Assessment helps ensure that our policies and measures protect and promote the wellbeing of children and young people. A child is defined as anyone under the age of 18 as per the United Nations Convention on the Rights of the Child.

We recognise that the proposals within this consultation paper will have impacts on children and young people, and those we have considered are set out below.

We expect the various proposals in this consultation paper will have a direct or indirect impact on the following articles of the United Nations Convention on the Rights of the Child: Article 3 (best interests of the child), Article 23 (rights of disabled children) and Article 26 (Social Security).

The proposal to address overpayment liability will have a positive impact on children's rights. For example, currently a child entitled to Child Disability Payment has a statutory liability to repay an overpayment under s63 of the Social Security (Scotland) Act 2018. The proposal will allow statutory liability to be placed on the parent/ guardian instead. Another potential impact on children's rights as a result of this proposal will be the impact of parents/ guardians having to repay debt, but there are robust measures in place to prevent hardship. Where debts are to be recovered, all household finances and circumstances are taken into account.

Any potential changes to fraud powers may impact upon young people between the ages of 16 and 18 because they may be the subject of an investigation, a witness or be acting in some other capacity such as an appointee or a support for another person under investigation. They could be investigated or prosecuted either in relation to their own application for benefit, or in relation to an application for another person on whose behalf they have been acting. This would only be expected to happen in exceptional circumstances.

There will be different impacts on different groups of young people due to age. There will be no direct impact on children under the age of 16 as only those over the age of 16 will be the subject of an investigation. As is currently the case in the UK reserved system, until the age of 16 a person will be represented by an adult who is responsible for all benefit related activities.

The proposal to have more flexibility in how Social Security Scotland delivers Scottish Child Payment does not in itself have a direct or indirect impact on children's rights. Having more flexibility over the delivery of Scottish Child Payment would give us the opportunity to explore ways to further increase the positive direct and indirect impacts on those under the age of 18.

Future options and proposals for Scottish Child Payment will have to be considered and consulted upon and the impact on children's rights will be closely monitored during this process. Further impact assessments will be completed as any future policies are developed.

The proposal to allow a new determination to be made after an appeal has been lodged where new evidence is provided or an official error identified, could potentially have a positive impact on children's rights. The proposal would mean that errors could be rectified more quickly, and if the appeal stopped, people would not have to wait for the Tribunal to make a decision. The early resolution of a dispute is in the child's best interests as it could offer greater financial certainty and remove stress.

We have not so far identified any direct or indirect impact on children's rights from the proposed policies on appointees; compensation recovery; re-determination rights; the independent advice and scrutiny of social security or COVID-19 measures.

The proposal to recover compensation intends to replicate the existing compensation recovery system, which already operates at UK level, for the recovery of assistance delivered by Social Security Scotland.

Getting It Right For Every Child (GIRFEC) is Scotland's national approach to improving the wellbeing of children and young people. It is based on children's rights and its principles reflect the United Nations Convention on the Rights of the Child (UNCRC).

GIRFEC promotes eight indicators that matter when talking about the wellbeing of children or young people. The relevant wellbeing indicators for the proposals are:

Healthy: The proposals described in this consultation paper aimed at improving client experience of the social security system in Scotland will have an indirect impact on the health and wellbeing of children and young people whose households are receiving assistance from Social Security Scotland.

Where processes are streamlined, rights-based and person-centred then this could impact on the wellbeing of all in the household by reducing stress and uncertainty about finances. Additional flexibility over the rules governing Scottish Child Payment would help ensure we could align it more closely with other forms of assistance, such as Best Start Grant and Best Start Foods. These forms of assistance are aimed at attaining high standards of physical and mental wellbeing through supporting children to have a healthy start during the crucial early years period.

Included: The proposal to have more flexibility over the qualification criteria for Scottish Child Payment may give the Scottish Government greater opportunity to help children and young people overcome inequalities caused by socio-economic disadvantage. By helping children to overcome barriers, this proposal could help children and young people to feel included and accepted in their community.

Q42. Do you have any information you wish to share on the impact of the proposals on children's rights and wellbeing?

Please provide details, making reference to the specific proposal or proposals to which your comments relate.

Business and Regulatory Impact Assessment

A Business and Regulatory Impact Assessment analyses the potential costs, benefits and risks of policy changes that may impact on the public, private or third sector. The aim is to use evidence to identify the proposal which best meets the objectives while keeping costs and burdens to a minimum.

We have considered the potential business and third sector impacts of creating a mechanism to recover any Social Security assistance paid to a person who then receives compensation for the same injury or disease.

We recognise that there is likely to be an impact on the private and third sector as a result of this proposal, particularly the insurance industry and law sector. This impact could include additional administration burdens and the greater risk of error.

As the options for a compensation recovery delivery mechanism are considered and developed we will pay close attention to the potential burdens, costs and benefits to these businesses. We aim to work with stakeholders across the insurance and legal sectors to better understand any potential impacts on their businesses. We will ensure that, in advance of future changes, we provide sufficient information in order to reduce any potential impacts.

We do not foresee the proposals having any impact on the legal aid fund.

Q43. Do you have any information you wish to share on the impact of the proposals on businesses or organisations in the public, private or third sector?

Please provide details, making reference to the specific proposal or proposals to which your comments relate.