Building a New Scotland: Social security in an independent Scotland

Annex A – Summary of Working-Age Reserved Benefits

Universal Credit^[116]

Universal Credit (UC) is a single monthly payment that was introduced by the UK Government in 2013. It was designed to replace six working-age benefits:

• Working Tax Credit
• Child Tax Credit
• Housing Benefit
• Income Support
• Income-based Jobseeker’s Allowance (JSA)
• Income-related Employment and Support Allowance (ESA)

The roll-out of UC for new claims started in 2013 and was completed in December 2018. Existing legacy claims have been gradually migrating to UC. However, the completion date for this keeps being pushed back, currently aiming to be complete by the end of 2028-29.

As of September 2023, there were 6,143,206 claimants in GB^[117] and 498,739 in Scotland (Scotland share – 8.17%).^[118]

Working Tax Credit and Child Tax Credit^[119]

Working Tax Credit & Child Tax Credit are low-income benefits for people in work and their children.

As of April 2023, there were 1,146,000 families claiming tax credits in the UK and 80,000 in Scotland (Scotland share – 6.98%).

Housing Benefit^[120]

Housing Benefit can help you pay your rent if you’re unemployed, on a low income or claiming benefits other than Universal Credit.

As of May 2023, there were 2,401,389 clients in GB and 242,073 in Scotland (Scotland share – 10.09%).

Income Support^[121]

Income support is a payment to help if you have no income or a low income, and no more than £16,000 in savings, you’re not in full-time paid work (you can work less than 16 hours a week, and your partner can work less than 24 hours a week).

As of February 2023, there were 152,948 clients in GB and 14,283 in Scotland (Scotland share – 9.34%).

Income-based Jobseeker’s Allowance^[122]

JSA is a benefit for people who are actively looking for work.

As of February 2023, there were 92,577 clients in GB and 8,344 in Scotland (Scotland share – 9.01%).

Income-related Employment and Support Allowance^[123]

ESA is a benefit for disabled people or those who have a health condition that affects how much they can work.

As of February 2023, there were 1,627,844 clients in GB and 186,045 in Scotland (Scotland share – 11.43%).

Child Benefit^[124]

Child Benefit is paid by HMRC to a person who has responsibility for a child under 16 (or under 20 if they stay in approved education or training). The benefit is universal but there are tax implications if they or their partner earn more than £50,000. The weekly rate is higher for the oldest child in the household (£24.00) than any younger children (£15.90). In August 2022, there were 868,185 children in families in Scotland who were receiving this.

Guardian’s Allowance

Guardian’s Allowance is also payable by HMRC to people who qualify for Child Benefit and are bringing up a child whose parents have died. They may also be eligible if there’s one surviving parent. The Guardian’s Allowance rate is £20.40 a week. It is paid on top of Child Benefit and it’s tax-free. The number of recipients in Scotland is not known.

New-Style Job Seeker’s Allowance

This is a contribution-based benefit, payable for up to six months, for people who have paid sufficient NI contributions in the last three years, are out of work, and are actively looking for a new job. Unlike Income-based JSA, it is not being replaced by Universal Credit.

New-Style Employment Support Allowance

This is a contribution-based benefit, payable for up to one year (or indefinitely for people who are in the ‘support group’ due to the severity of their illness or disability), for people who have paid sufficient National Insurance (NI) contributions in the last three years and are unable to work due to their illness. Unlike Income-based ESA, it is not being replaced by Universal Credit.

Maternity Allowance^[125]

Maternity Allowance is payable by DWP to a person who takes time off work to have a baby, if they are self-employed and pay Class 2 NICs, or are employed but do not qualify for Statutory Maternity Pay from their employer.

Maternity Allowance is payable for up to 39 weeks, and it can be paid from 11 weeks before the due date. If they’re employed or have recently stopped working, they will get £172.48 a week or 90% of their average weekly earnings (whichever is less) for 39 weeks. If they’re self-employed, they can get between £27 and £172.48 a week for 39 weeks, depending on their NI contributions. In February 2022, 3,000 people were receiving Maternity Allowance in Scotland.

Statutory Maternity Pay

Statutory Maternity Pay is paid by employers for up to 39 weeks. They can usually re-claim 92% or 102% of the Statutory Maternity Pay paid to their employee (depending on the size of their business) from HMRC. Statutory Maternity Pay is payable at:

• 90% of the employee’s average weekly earnings (before tax) for the first 6 weeks
• £172.48 or 90% of their average weekly earnings (whichever is lower) for the next 33 weeks

The Scottish Government estimate that around 20,000^[126] people were receiving Statutory Maternity Pay in Scotland in 2020-21.

Bereavement Support Payment^[127]

Bereavement Support Payment has replaced Bereavement Allowance (previously Widow’s Pension), Bereavement Payment, and Widowed Parent’s Allowance. It is paid by DWP to those under State Pension age whose partner dies, if the partner either: paid National Insurance contributions for at least 25 weeks in one tax year since 6 April 1975; or died because of an accident at work or a disease caused by work.

It is paid as a lump sum, followed by up to 18 monthly payments, with a higher rate going to those who also qualify for Child Benefit. In March 2023 there were 5,044 people receiving Bereavement Support Payment in Scotland.

Armed Forces Compensation Scheme^[128]

The Armed Forces Compensation Scheme is administered by Veterans UK and compensates for any injury, illness or death which was caused by service on or after 6 April 2005. As of March 2023, there were 356 people in Scotland receiving support from the Armed Forces Compensation Scheme.

People who are entitled to an award from the Armed Forces Compensation Scheme at a certain level will also be entitled to an allowance called Armed Forces Independence Payment, which is paid at the same rate as the combined enhanced daily living and mobility components of Personal Independence Payment.

War Pension Scheme^[129]

The War Pension Scheme compensates for any injury, illness or death which was caused by service before 6 April 2005 and is also administered by Veterans UK. As of March 2023, there were 8,447 people in Scotland receiving support from the War Pension Scheme.