Scottish Child Payment: updated position paper - January 2020

Design and Delivery Development

Arrangements for launch of the Scottish Child Payment

When the Scottish Child Payment is introduced in autumn 2020, it will mark the first time that Social Security Scotland has administered a very high-volume, recurrent benefit. An estimated 140,000 households with children aged under 6 will be eligible for the new payment. Applying an assumed 83% take-up rate (based on Child Tax Credits take-up by income, which we have assumed to be the closest comparator), we would expect around 116,000 applications for the benefit from eligible households.

A percentage of ineligible households is also likely to apply: based on comparator benefits we estimate that 7% of applications received will be from people who are in fact ineligible for the new payment. This will take the total number of applications that Social Security Scotland needs to be prepared to consider immediately after launch of the benefit to approximately 125,000. To put that in context, over the whole period from 10 December 2018 to 30 September 2019 Social Security Scotland received around 96,000 applications for all three Best Start Grant benefits and Best Start Foods put together.

This means that launch of the Scottish Child Payment will be an unprecedented challenge for Social Security Scotland. Given the expected volumes of eligible households, and as this is a brand new benefit to be applied for, if we introduce the new payment in the same way that we introduced previous benefits, we would expect an immediate large backlog of cases to develop in the first week and continue to build in the first months of its operation. This would lead to unacceptable delays in processing cases and making payments to eligible clients, which could spiral as people contact the agency to find out how their application is progressing, meaning that staff are spending more time explaining what stage an application is at and less time processing cases.

We have concluded that the best way to avoid this scenario would be to have a gap of a few months between the date when people can first apply for the Scottish Child Payment, and the date from which they will be paid (the "eligibility date" for the benefit). Social Security Scotland will contact people to let them know the decision on their application after the eligibility date, with payments following thereafter in arrears.

This approach should give Social Security Scotland the opportunity to process the majority of the expected applications before the eligibility date. It will also mean that at the time they apply for the new payment, people will know when they can expect a decision on their application, and approximately when they can expect to be paid if they are eligible, allowing them to plan ahead and reducing the need to get in touch with the agency to find out what is happening with their claim. This will also allow us to spread out the work for Social Security Scotland to administer the expected application volumes for the Scottish Child Payment, and reduce the pressure on the agency's services and the risk that staff will need to be redeployed from other benefits to administer it.

Payment cycles

People who apply for the Scottish Child Payment before the eligibility date will be paid from the eligibility date. As set out in previous papers, payments will be made in arrears: this is because we are making the payments using our top-up powers, which require us to know that a person was entitled to a reserved benefit during the period for which we are making the payment, and it is only possible to know this in retrospect. When the new payment is fully up and running, and being administered on a "business as usual" basis, people will receive their payments every four weeks.

However, we will need slightly different arrangements for the first batch of payments for the new benefit, since the expected high volume of applications will require a very large number of payments to be made in quick succession following the eligibility date. Even though there will be a single eligibility date, to manage the very high payment volumes, Social Security Scotland will make these payments over several weeks rather than making payments to all of the expected 116,000 eligible applications in a single day (and every four weeks thereafter).

Accordingly we plan to issue the first round of payments for the Scottish Child Payment over a four-week period following the eligibility date, with some people receiving a one, two or three-week payment to get them into their normal four-weekly cycle. This will allow Social Security Scotland to manage the volume of payments successfully, while also ensuring that clients are not disadvantaged. After the eligibility date, we will start to write to people to confirm whether or not they are eligible and when they should expect their first and subsequent payments.

Date from which initial payments will run

As set out above, there will be a single eligibility date for our first Scottish Child Payment clients. All payments will start from this date regardless of when exactly anyone applies in the window between when we begin accepting applications for the benefit, and the eligibility date. We will make sure that clients who will be affected are told about this approach at the time when they apply, and reminded again while their application is being processed.

This is a temporary measure which will apply in the first months after the launch of the new benefit. We have adopted it for two main reasons:

i. Paying from a single eligibility date means that it will be easier for Social Security Scotland to encourage a managed influx of claims, rather than a rush of tens of thousands of new applications. Clearly if people know that they will be paid from the date they apply then it is in their best interests to apply as soon as possible, creating the kind of backlog and payment delays discussed above. By paying everyone from a single set date that they will know about in advance, we will make sure that people aren't financially disadvantaged by putting in their application slightly later, and thereby reducing the administrative burden on Social Security Scotland.

ii. In terms of operational delivery, it will also be quicker and more straightforward for Social Security Scotland staff to use a single eligibility date when they are processing initial applications for the Scottish Child Payment than to generate individual backdated entitlements for each claim. Quicker processing times will help the agency to manage the expected high volume of claims in the first months after applications open for the new benefit.

Supporting services

As well as the work underway to deliver the Scottish Child Payment, the Social Security Programme and Social Security Scotland are undertaking a significant amount of work on key supporting service areas, to ensure that they are robust enough to support the high volumes of applications expected. Supporting services are the fundamental services that Social Security Scotland needs to administer all benefits, e.g. appeals and debt, and audit and financial controls.

The programme is prioritising development in service areas where existing solutions delivered to support the current low-income benefits require improvement, or where they would not be able to accommodate the substantially higher volume of applications expected for the Scottish Child Payment. Key areas for development include:

i. Appeals and redeterminations. At present, requests for redeterminations and appeals are largely managed clerically; but the high volumes of Scottish Child Payment cases expected will mean that we need a digital solution to ensure that Social Security Scotland continues to meet the statutory timescales associated with such requests. The digital solution will also mean that we can automatically collect and report management information on redeterminations and appeals: at present this is done manually.

ii. Debt and error. The Scottish Child Payment will be the first benefit where we will have the opportunity to recover overpayments via deductions directly applied to a client's Scottish Child Payment award. We will undertake additional work to ensure that this functionality will also be available for debt management. This will improve the client journey, and align with user research conducted ahead of the launch of our Debt Management Service in February 2019, where 74% of clients surveyed told us that this would be their preferred method of repayment.

iii. Financial processes. The expected high volumes of Scottish Child Payment applications and the recurring nature of the payments will greatly increase demand on financial processes, meaning that some of the more resource-intensive handling arrangements currently in use will no longer be sustainable and will need to be automated.

iv. Audit. In light of the increased caseload that launch of the Scottish Child Payment will create, it is critical that system level controls are strengthened. Specifically, we will need to develop automatic internal controls on Social Security Scotland's case management system to ensure robust operational and regulatory risk management on existing and future cases.

v. Management information. We need to ensure that we build a system that enables data required for management information purposes to be captured in time for the launch of Scottish Child Payment so that we can ensure coverage of all cases, and be in a position to report on delivery of the new benefit to Parliament and stakeholders, and to the Scottish Fiscal Commission for their forecasts.

vi. Public Protection. The Scottish Child Payment will increase interactions between clients and Social Security Scotland, and so we will need to implement and enhance the processes needed to safeguard clients, staff and any other users whilst using the service. Areas covered by Public Protection include Unacceptable Actions, Lone Workers and the Multi Agency Public Protection Agreement (MAPPA).

From January 2020 onwards we will concentrate resources on addressing these six key areas. We have already awarded an additional contract to support the development work required.