Scottish Child Payment: updated position paper - October 2019

Introduction

On 26 June, the Scottish Government announced our intention to introduce a new benefit to provide additional support for low income families, and help tackle child poverty – the Scottish Child Payment.

As set out at the time of the announcement, the Scottish Child Payment will be administered by Social Security Scotland through an application-based process, and will be a payment for each eligible child in the family: there will be no cap on the number of eligible children a family may receive a payment for.

Early payments of the Scottish Child Payment will be made to families with children under the age of 6 – recognising that, of all children in poverty, almost 60% live in a household where the youngest child is aged under 6, and the early years are key to improving long-term outcomes. These early payments could support around 170,000 eligible children in around 140,000 households, and we expect to invest around £70 million in 2021/22 (the first full year of payments to under 6s).

At the time of the initial announcement being made, we expected these early payments to begin before the end of the current Parliamentary term in 2021. However, following further detailed work to consider delivery implications, and in recognition of the scale of the challenge on child poverty, we announced in the 2019 Programme for Government (PfG) that this date would be brought forward. As set out in the PfG, the Scottish Child Payment will now open for applications in autumn 2020, with the first payments reaching families by Christmas 2020.

Assuming that we get the cooperation we need from the UK Government, the Scottish Child Payment will be rolled out to all eligible children under 16 before the end of 2022. Once fully rolled out, it could support up to 410,000 children and young people – meaning over a third of all children in Scotland will be eligible. We expect to invest around £180 million in the benefit, and reduce relative child poverty by 3 percentage points.

At the time of the initial Scottish Child Payment announcement, we published a position paper, setting out the process of development of the Scottish Child Payment and the expected policy impacts it will have. It was published alongside both the Tackling Child Poverty Delivery Plan – First Year Progress Report 2018-19 and Analysis of Options for the Income Supplement, a detailed analytical paper that shows the consideration given to a wider set of policy options.

This updated position paper sets out policy developments in relation to the Scottish Child Payment which have been undertaken alongside continued work on service design and delivery.