Social Security assistance - effects of inflation: report 2020-2021

9. Carer's Allowance Supplement Statement

9.1 As Carer's Allowance has the lowest rate of all working age benefits, the Carer's Allowance Supplement was designed to increase Carer's Allowance to the level of Jobseeker's Allowance. The supplement is an interim measure until the Scottish Government is delivering Scottish Carer's Assistance in full under the powers in the 2018 Act.

9.2 Section 81 of the Act provides a formula for determining the rate of Carer's Allowance Supplement by calculating the difference between the weekly rate of Carer's Allowance and Jobseeker's Allowance. To ensure the support provided through the Supplement is protected as prices change, Section 81 provides for the amount of Jobseeker's Allowance used in this calculation to be uprated for inflation, while taking into account any changes in the rate of Jobseeker's Allowance since the introduction of the Supplement. This means that since the introduction of Carer's Allowance Supplement in 2018, the Jobseeker's Allowance rate used for its calculation was uprated with inflation despite Jobseeker's Allowance remaining frozen at 2015-16 prices under the UK Government benefit freeze policy until April 2020.

9.3 As no legislation is required to uprate Carer's Allowance Supplement, Scottish Ministers are to publish a statement before the start of each new tax year, explaining how inflation has been calculated for this purpose. It is appropriate to include this statement within this report.

9.4 For 2021-22, Scottish Ministers will use the rate of Jobseeker's Allowance calculated for 2020-21 (£76.10), uprated by September 2020 CPI of 0.5%, in the calculation of Carer's Allowance Supplement – giving a rate of £76.50.

9.5 The effect of this will be to uprate the Supplement, increasing the weekly rate from £8.85 to £8.90, so that the bi-annual payment will increase from £230.10 to £231.40.