Scottish Child Payment: updated position paper - January 2020

Legislative Developments and Stakeholder Update

Background

Given the tight timescales for delivery, the Scottish Child Payment will be introduced through secondary legislation, using the powers to top up a reserved benefit contained in Section 79 of the Social Security (Scotland) Act 2018. The draft regulations are currently being scrutinised by the Scottish Commission on Social Security (SCoSS). SCoSS held a stakeholder event to consider the shape and detail of the draft regulations on 18 November.

The Commission will publish a report following their scrutiny process which will contain their recommendations to the Scottish Government. We will consider SCoSS' recommendations when we are finalising the draft legislation and will provide a formal response to SCoSS' report when the regulations are laid in the Scottish Parliament in spring 2020.

Alongside work to finalise the legislation, we continue to engage with stakeholders as part of the Scottish Child Payment's development. We have prioritised user research and testing, ensuring those who will benefit directly from the payment have an opportunity to shape what it will look like, and how it will be delivered. To date, we have engaged with over 200 citizens in this way.

We are also continuing to engage with stakeholders from a policy perspective, particularly to consider issues around benefit take-up. The Scottish Government recognises that groups with protected characteristics will often experience barriers to accessing benefits, which could be social, accessibility related or resulting from a lack of information. We recently published our first Benefit Take-up Strategy^[1], setting out the ongoing work of the Scottish Government and Social Security Scotland to address barriers to benefit take-up. For the Scottish Child Payment this is a key part of our user research and we are working across partner agencies, advice and advocacy services to understand how we can best raise benefit awareness.

We are also engaging with stakeholders around the impacts of the Scottish Child Payment on those with protected characteristics for the impact assessments which accompany the draft regulations. We have hosted a specific equalities event on this, with further equalities workshops planned shortly.

Development of regulations

Before laying regulations in the Parliament, Scottish Ministers are required to refer draft regulations to SCoSS, who undertake a period of scrutiny and submit a report and recommendations to the Scottish Government on them. This section sets out the changes that have been made to the revised regulations that we published on 20 December. This includes changes made in response to points raised by SCoSS during its scrutiny process.

We will also provide a full response to SCoSS' final report when it is published, and may also subsequently make further changes to the regulations.

Maximising uptake

We are committed to ensuring that application processes for the Scottish Child Payment are as simple as possible, and that we do all that we can to maximise uptake of the benefit. As such we have made a number of changes to the "determination without application" provisions of the draft regulations.

We have included provision to allow for a 12 week "linking period" during which the client would stay on the system and would not have to reapply for the Scottish Child Payment if they subsequently came back into qualifying benefit or child responsibility benefit entitlement. A 12 week linking period for the Scottish Child Payment replicates the 12 week period which Best Start Foods has in place, ensuring that the processes for both benefits are aligned, given that we will be offering a combined application.

In keeping with Scottish Ministers' commitment to minimise the burden on clients, we have also included determination without application provisions, which means that clients are not required to make a whole new application for any additional children they may become responsible for. This is in line with points made by SCoSS during the scrutiny process for the regulations.

As set out in the position paper of 4 October, the draft regulations also include provisions to allow Scottish Ministers to make a determination without application where an individual been unsuccessful in their Scottish Child Payment application as a result of an incorrect reserved benefit decision. Further to comments from SCoSS, we have included provision relating to a backdated award of a child responsibility benefit (in addition to the existing provision on qualifying benefits) and removed the word "appeal" to ensure that we capture all instances of incorrect reserved benefit decisions.

Child Responsibility Test

Legal/Parental orders

Following further consideration of the issues, we have determined that the Scottish Child Payment should not include provisions for individuals with a legal/parental order to use this as evidence of child responsibility. The exception to this will be orders to evidence kinship care. In the first draft of the regulations we had initially replicated the Best Start Grant responsibility test; however, such orders were only included to ensure that non-birth mothers would be eligible for the Pregnancy and Baby Payment where the main eligibility condition is that the applicant (or partner or dependant of the applicant) has been at least 24 weeks pregnant or has given birth in the last 6 months.

As such we do not consider that there is a need to include such orders to evidence child responsibility for the Scottish Child Payment, as there is a risk that maintaining them may create an (unnecessary) two-tier system. There are also risks as to how ongoing responsibility would be tested through such orders, as they only evidence child responsibility at that specific point in time. In any instance where a person has taken responsibility for a child following surrogacy or adoption, they would become eligible for a child responsibility benefit, and should be expected to apply for that as a means also to be eligible for the Scottish Child Payment, in the same way as a birth parent would. This approach ensures that we can be more responsive to changing family circumstances, with reference to the underlying child responsibility benefits.

Competing claims

We have been considering further how to treat competing claims, for instance in circumstances where couples have separated, as only one payment can be made for any individual child. For the child responsibility benefits, HMRC and DWP would expect parents to decide between them who will claim a benefit (and will decide themselves if agreement cannot be reached). However, it is possible for one parent to claim Child Benefit, while the other claims Child Tax Credits, Universal Credit Child Element, or Pension Credit Child Addition. Where both parents are also in receipt of an eligible qualifying benefit, both could therefore claim the Scottish Child Payment.

To resolve this, we are proposing to introduce a hierarchy of benefits to be used in instances of competing claims. Under UK benefit regulations, Child Tax Credits, Universal Credit Child Element, and Pension Credit Child Addition are seen as having a more robust test of responsibility, given that the child has to live with the person who is claiming the benefit. As such, in cases where there were competing claims, we would specify that the agency will pay the person in receipt of Child Tax Credits/Universal Credit Child Element/Pension Credit Child Addition, rather than Child Benefit.

Residential care

Further to comments provided by SCoSS, we have removed the exclusion on individuals being eligible for the Scottish Child Payment if the child they are responsible for is in residential care. This ensures that we capture individuals who should remain eligible (e.g. parents of disabled children who are in special education). Moreover, as with legal orders, any change in responsibility should be captured by reserved benefits, and as a top-up based on reserved benefit entitlement, we will follow that benefit entitlement.

Partner application

As set out in the previous policy position paper, the Scottish Child Payment will have a simplified application process which links with Best Start Grant and Best Start Foods so new applicants only need to provide information once. As with both of these benefits, Scottish Child Payment applications will allow either of a couple in a household to apply. This decision was taken given that we are utilising the same technical build for the Scottish Child Payment as Best Start Grant and Best Start Foods, which will provide a streamlined application process and reduce the burden on clients.

Whilst we are currently accepting partner applications for the Scottish Child Payment, we are also exploring how the benefit might be paid to the main carer of the child in future. The legal route that we have chosen to deliver the payment quickly means that child responsibility for the Scottish Child Payment is determined through the data that we receive from DWP and HMRC. We are therefore reliant upon the information that they hold recognising that a "main carer" is usually only determined when a couple has separated. We recognise the importance of this issue, however, and are considering what options might be available within our legal powers and the data that could be made available.