Sixth Annual Report on the Implementation of the Scotland Act 2016: Tenth Annual Report on the Implementation and Operation of Part 3 (Financial Provisions) of the Scotland Act 2012

7. Social Security

Part 3 of the Scotland Act 2016 contains 14 Sections relating to social security and employment support.

The Scottish Government is responsible for the implementation of these powers, ensuring the safe and secure transition of the benefits being devolved to Scotland and the design of new benefits as part of a Scottish social security system with dignity, respect and fairness at its heart. To achieve this, a Social Security Programme was established and a new agency, Social Security Scotland, created.

Social Security Scotland operates in accordance with the eight principles set out in the Social Security Charter and Social Security (Scotland) Act 2018. This gives the Scottish Parliament greater powers to ensure that social security in Scotland meets the needs of Scottish citizens.

Social Security Scotland is already successfully delivering twelve benefits and, once fully transferred, the Scottish Parliament and Scottish Government will be responsible for the delivery of social security benefits ultimately worth over £5 billion each year in Scotland.

Costs

75. The costs set out in Table 7.1 have been updated following last year's report and are based on our latest annual accounts and budget. Social Security Scotland includes a range of administration and operational costs to support the delivery of payments and services. The work that the Scottish Government undertakes is funded from the Advice, Policy and Programme budget line within the Scottish Government's Social Justice, Housing and Local Government Portfolio. The table shows the Resource and Capital costs of the work that the Scottish Government undertakes, including the Implementation Costs of the Social Security Programme. The figure excludes the allocated share of the Scottish Government's Corporate Running Costs and ring-fenced non-cash Depreciation.

76. A more detailed breakdown can be found in the Social Security Programme Business Case (PBC), published in February 2020^[22]. The costs detailed in the PBC do not include the impacts of COVID-19, which has had a major impact on the Scottish Government, on Social Security Scotland, and on the Department for Work and Pensions (DWP), whose support we need to transfer social security powers. The PBC will be updated in due course to reflect this impact.

77. The PBC provides a view on the whole-life costs and benefits of the Scottish Government's Social Security Programme, over a 30-year timeframe to 2050. It shows the Scottish Government's investment in creating a new public service for Scotland, co-designed by those with lived experience and built from scratch with dignity, fairness and respect at its heart, and which will deliver for the people of Scotland for years to come.

78. Executive Competence for Carer's Allowance transferred to the Scottish Government on 1 September 2018, and for Attendance Allowance, Disability Living Allowance, Personal Independent Payment, Industrial Injuries Disablement Benefit, and Severe Disablement Allowance on 1 April 2020. The Department for Work and Pensions continues to administer these benefits through Agency Agreements on behalf of Scottish Ministers. For 2021-22, Social Security Scotland expects £76 million to be spent on Agency Agreements. The Agency Agreement costs that the Scottish Government accepts from the Department for Work and Pensions are scrutinised to ensure validity, consistency and compliance with jointly agreed inclusions and exclusions. These costs will reduce over time as Social Security Scotland begins to fully administer these benefits.

79. The Scottish Government funds implementation costs incurred by the UK Government as a result of the devolution of welfare powers. For 2021-22 the PBC includes a forecast of £17 million for implementation recharges.

The Social Security (Scotland) Act 2018

80. In 2021-22, the Scottish Parliament passed legislation^[23] to underpin the delivery of the Social Security (Scotland) Act 2018, which sets out the over-arching legislative framework for the Scottish Government's Social Security powers.

81. This included various regulations relating to the introduction of Child Disability Payment and Adult Disability Payment. In addition, there were amending regulations relating to Scottish Child Payment, Best Start Grant and Child Winter Heating Assistance, as well as the annual legislation relating to the uprating of Young Carer's Grant, Funeral Support, Best Start Grant, Child Winter Heating Assistance, Scottish Child Payment, Adult Disability Payment and Child Disability Payment.

Carer's Allowance Supplement (Scotland) Act 2021

82. In October 2021, the Scottish Parliament passed the Carer's Allowance Supplement (Scotland) Act 2021. This Act ensured carers in Scotland in receipt of Carer's Allowance Supplement received a further Coronavirus Carer's Allowance Supplement in December 2021, resulting in eligible carers in Scotland receiving up to £694.20 more support in 2021 compared to those in the rest of the UK. The Act also contains an enabling provision that allows for a more flexible approach to future payments should the circumstances require it.

Social Security Scotland

83. Social Security Scotland delivers its services in accordance with the eight principles set out in the Social Security (Scotland) Act 2018^[24] and the Social Security Charter^[25]. Foremost amongst these principles is the requirement that people be treated with dignity, fairness and respect.

84. In November 2021 the combined results from the first and second rounds of the Social Security Scotland Client Survey showed that people have a very positive experience of Social Security Scotland. 92% of people responding to the survey said their overall experience was 'very good' or 'good'; and 94% of people who had been in touch with client advisers reported they had been treated with kindness.

85. Social Security Scotland is now well established and directly employs over 1,800 Full Time Equivalent staff across its various sites (as of 31 December 2021)^[26]. It is forecast to deliver around £3.5 billion of benefit payments by the end of 2021-22, £3.3 billion through Agency Agreements and around £0.2 billion directly. Further details of this spending will be provided in Social Security Scotland's Annual Report and Accounts for the period, which will be published in winter 2022, in accordance with statutory timescales.

86. With the launch of the Adult Disability Payment pilot in March 2022, Social Security Scotland's service has now expanded to twelve separate benefit payments. It will continue to build capacity and capability in 2022-23 in preparation for the launch of the remaining devolved benefits.

Scottish Government policy development and implementation

87. During 2021-22, the Scottish Government has continued to adapt to the challenges of COVID-19, ensuring the safe and secure delivery of the remaining devolved benefits.

88. Together with Social Security Scotland, we have introduced our first application-based disability benefit, Child Disability Payment, while the systems and capability continue to be developed to deliver the remainder of the devolved benefits outlined in the Social Security (Scotland) Act 2018.^[27]

89. We have further benefit delivery underway, including: (i) launching Adult Disability Payment – the largest and most complicated of our new disability benefits – with a pilot in spring 2022 and full national rollout by summer 2022; (ii) doubling Scottish Child Payment in April 2022 and increasing Scottish Child Payment to £25 at the same time as extending it to eligible under 16s by the end of 2022, and (iii) introducing our new £50 Low Income Winter Heating Assistance this winter, replacing Cold Weather Payment in Scotland.

90. We are working with carers and stakeholders to develop a replacement benefit for Carer's Allowance (currently known as Scottish Carer's Assistance) that works better for the people of Scotland – maintaining the extra amount provided by Carer's Allowance Supplement and including extra support for those with multiple caring roles. We launched a public consultation on these proposals in February 2022.

91. We continue to work with the Department for Work and Pensions, and our other delivery stakeholders, to agree an ambitious but deliverable timetable for launching the remaining devolved benefits, and completing case transfer, taking into account what we have learned during the COVID-19 pandemic.

Benefits Launched

Child Disability Payment

92. Delivery of Child Disability Payment began with a pilot to take new applications from children in the local authority areas of Perth and Kinross, Dundee City and Western Isles in July 2021. The pilot was followed by a national launch in November 2021. Child Disability Payment is the first of the complex disability benefits to be introduced nationwide by the Scottish Government and replaces Disability Living Allowance for children, which was delivered by the Department for Work and Pensions. The payment provides financial assistance to help meet the additional costs associated with having a disability, for eligible disabled children up to the age of 18 years old.

93. The phased transfer of cases for children aged over 15 and a half to 17 from Disability Living Allowance for children to Child Disability Payment began in October 2021, and children under 15 and a half will have their awards transferred from spring 2022. Social Security Scotland aims to have completed the transfer for everyone in receipt of Disability Living Allowance for children by spring 2023.

Disability Assistance

94. A key priority is the safe and secure transfer of Disability Assistance (Adult Disability Payment, Child Disability Payment and Pension Age Disability Payment), including existing Scottish clients, from the UK Government to Social Security Scotland, which means that in the immediate future fundamental changes will not be made to the existing benefit structure or rules. However, a number of ways have already been identified to provide disabled people with a fundamentally different experience when applying for and receiving the support to which they are entitled.

95. Adult Disability Payment, which replaces the UK Government's Personal Independence Payment, began its pilot in spring 2022 and will be available across Scotland by summer 2022. Work is ongoing with stakeholders to make significant changes to how disabled people in Scotland experience accessing disability assistance, such as through an application process which is inclusive, accessible, provided in a range of formats, available through a number of routes (online, phone, post and in-person) and transparent. The Department for Work and Pensions assessments have been replaced by consultations which will be undertaken by a Social Security Scotland practitioner. These consultations will only be necessary when there is no other way of gathering the information to make a determination on a person's entitlement.

96. Pension Age Disability Payment will replace Attendance Allowance, a benefit for people aged over 65 years old, and currently administered by the Department for Work and Pensions. It is awarded to help with extra costs if a person has a disability severe enough that they need someone to help look after them. It is the Scottish Government's intention to provide this form of assistance for the same purpose - to mitigate costs associated with care needed as a result of having a disability. The Scottish Government is continuing to work with delivery partners including the UK Government to re-plan delivery of Pension Age Disability Payment and agree when it will be possible to launch the new benefit in Scotland.

Child Winter Heating Assistance

97. Child Winter Heating Assistance was introduced in November 2020 for children and young people who receive the highest rate of the care component of Disability Living Allowance or Child Disability Payment for at least one day of the qualifying week in September. The purpose of this form of assistance is to provide some mitigation for the additional costs of heating a home to meet the needs of a disabled child or young person, both during the day and at night.

98. The assistance consists of an annual payment for each eligible child or young person (£200 in 2020 and £202 in 2021), with most payments being made automatically to families. 14,015 Child Winter Heating Assistance payments were made in winter 2020-21, with a total value of £2.8 million. The Scottish Government widened the eligibility criteria in November 2021 to include young people who receive the enhanced rate of the daily living component of Personal Independence Payment.

Scottish Child Payment

99. The Scottish Child Payment was first introduced in February 2021 and, as of 31 December 2021, this unique benefit was reaching 104,000 children under six with £10 per week payments. The total value of Scottish Child Payments issued to clients during that period was £45.2 million, supporting people across all 32 local authorities in Scotland.^[28]

100. The Scottish Government has announced the payment will be doubled to £20 in April 2022 and plans to extend the payment to all eligible children under 16 years old by the end of 2022, when the payment will further increase to £25. Once fully rolled out, around 330,000 children could be in receipt of the Scottish Child Payment, with 500,000 children forecast to be lifted out of poverty in 2023-24.

101. Together with Best Start Grant and Best Start Foods, this will provide a package of financial support worth a maximum of over £10,000 by the time an eligible family's first child turns six.

Carer's Allowance Supplement

102. Carer's Allowance Supplement was the first payment made by Social Security Scotland and uplifts Carer's Allowance for eligible Scottish carers by around 13%. Since its launch in 2018, around 659,000 Carer's Allowance Supplement payments totalling £188.04 million have been made to around 126,000 Scottish carers.^[29]

103. Around 84,000 carers received an extra Coronavirus Carer's Allowance Supplement in June 2020. The Scottish Government made another extra payment of Carer's Allowance Supplement in December 2021, to support carers with the impacts of the pandemic. This meant almost 82,000 eligible carers in Scotland got up to £694.20 more support in 2021 compared to those in the rest of the UK.^[30]