Social Security assistance in Scotland: up-rating for inflation - 2025-2026

1. Purpose

1.1 This report is published under section 86A^[1] of the Social Security (Scotland) Act 2018^[2] (‘the 2018 Act’) which requires Scottish Ministers to consider the effects of price inflation on all forms of assistance delivered under Chapter 2 of Part 2 or sections 79 and 93 of the 2018 Act and to lay a report in the Scottish Parliament before the end of each financial year.

1.2 This report sets out the inflation-adjusted level of each relevant figure, explains how the inflation-adjusted levels have been calculated and states what the Scottish Ministers have done, or intend to do, in light of their calculations and their reasons for that decision.

1.3 The payments of assistance under the reporting duty in section 86A include:

1. Carers’ assistance (Young Carer Grant and Carer Support Payment)

2. Cold-spell heating assistance

3. Winter heating assistance (Child Winter Heating Payment, Winter Heating Payment and Pension Age Winter Heating Payment)

4. Disability assistance (Child Disability Payment, Adult Disability Payment, Pension Age Disability Payment and Scottish Adult Disability Living Allowance)

5. Early years assistance (Best Start Grant)

6. Employment injury assistance

7. Funeral expense assistance (Funeral Support Payment)

8. Housing assistance

9. Short-term assistance

10. Scottish Child Payment

1.4 Of those detailed above, the Best Start Grant, Child Winter Heating Payment, Winter Heating Payment, Pension Age Winter Heating Payment, Funeral Support Payment, Young Carer Grant, Carer Support Payment, Short-term assistance, Scottish Child Payment, Child Disability Payment, Adult Disability Payment and Pension Age Disability Payment have been delivered and are included in this report for consideration. Scottish Adult Disability Living Allowance has also been included in this report as it will be introduced in March 2025. The report is required to consider the change in prices before the end of the financial year. The previous report was laid before the Scottish Parliament on 29 January 2024^[3], containing the new rates that commenced from April 2024.

1.5 This report also explains how the inflation-adjusted level of Carer’s Allowance Supplement has been calculated and is being provided to offer a fuller picture of all the assistance delivered^[4]. Similarly, information on other forms of assistance not covered by the 2018 Act such as Job Start Payment and Best Start Foods is also included.

1.6 Finally, as detailed in section 86B^[5] of the 2018 Act, Scottish Ministers must bring forward legislation before the end of each financial year, to replace the payment amount in the Regulations which is, in their opinion, materially below its inflation-adjusted level. Following passage of the Social Security (Amendment) (Scotland) Act 2025, all forms of assistance that are set out in the 2018 Act and associated Regulations made under the 2018 Act are to be up-rated to the inflation-adjusted level calculated in accordance with section 86A.

1.7 This means that for the financial year 2025-26 there is a requirement to up-rate Funeral Support Payment, Carer Support Payment, Young Carer Grant, Scottish Child Payment, Child Disability Payment, Adult Disability Payment, Pension Age Disability Payment, Scottish Adult Disability Living Allowance, Child Winter Heating Payment, Winter Heating Payment, Pension Age Winter Heating Payment and the Best Start Grants. Carer’s Allowance Supplement must also be up-rated in accordance with section 81 of the 2018 Act.

1.8 Best Start Foods and Job Start Payment are not delivered through powers in the 2018 Act and as such, there is no legal requirement to up-rate these payments.

1.9 The Scottish Government is committed to embedding the eight Scottish social security principles in Section 1 of the 2018 Act into the policy making process. The approach to up-rating, in particular, is intended to reinforce the principles that:

• social security is an investment in the people of Scotland;
• social security is itself a human right and essential to the realisation of other human rights;
• the Scottish social security system is to contribute to reducing poverty in Scotland; and;
• opportunities are to be sought to continuously improve the Scottish social security system in ways which - i) put the needs of those who require assistance first, and ii) advance equality and non-discrimination.