The Social Security (Miscellaneous Amendment and Transitional Provision) (Scotland) Regulations 2022: business and regulatory impact assessment

Consultation

Within Government

There has been policy engagement with stakeholders throughout the development of the FFP and since launch. Consultation in relation to the amended regulations have included Scottish Government colleagues from Social Security Analysis, Forecasting and Evaluation and Director General Economy. As part of the consultation with Director General Economy we held a meeting with Retail and Cities policy, who could not identify any negative impacts on retail interests as a result of introducing the amended regulations.

External Stakeholders

We have also consulted with external stakeholders throughout the development of FFP and since launch. This has included workshops with anti-poverty organisations, think tanks, local authorities and academia to develop the policy and delivery model for them. We have held one to one meetings and attended a number of member events organised by the Scottish Campaign for Welfare Reform, the Social Security Consortium in Scotland and the Poverty Alliance, amongst others. These events have been designed to seek views on the policy for the FFP, identify any barriers towards claiming and consider how we can best maximise uptake of the benefit.

We also hosted a series of events and meetings to consider the impact of the FFP on those with protected characteristics, including on young people. We engaged with Fife Gingerbread; Young Scot; Inclusion Scotland; CEMVO Scotland; Engender; Scottish Women’s Aid; Families Outside; Shakti; and religious groups.

The Cabinet Secretary for Social Security and Older People hosted a stakeholder roundtable in January 2020 in relation to SCP, which was an open discussion with key stakeholders allowing them to ask questions about the policy and delivery of the benefit. The Cabinet Secretary for Social Justice, Housing and Local Government held an additional roundtable with stakeholders in August 2021.

We consulted with Scottish Women’s Aid and Safelives in relation to the proposal to amend regulations to provide a new exception to the general rule that an individual is only entitled to the higher Pregnancy and Baby Payment when they are applying in respect of their first child for those who have been forced to leave the home with a child or children due to domestic abuse. The feedback received was broadly positive and it was highlighted that women, whose earnings are often limited when pregnant or looking after a young child, frequently have no financial means to leave home when they are experiencing abuse.

We have also held a number of meetings with our FFP reference group, which is made up of a number of key stakeholders with an interest in the policy area, including Child Poverty Action Group, Citizens Advice Scotland, Engender and a number of other groups. At our meeting in January 2022, we provided the reference group with an overview of our proposed changes. The overall feedback we received was positive.

We have consulted with the Scottish Fiscal Commission who have provided forecasts for the increases in take-up for BSG Early Learning and School Age Payment and an updated forecast for the increase on SCP and BSG expenditure (see Tables 1 and 2 above).

Private businesses have not been consulted directly as it is expected that the amendments to FFP regulations will not have a negative impact on their interests, as outlined in our consultation with Scottish Government Retail and Cities policy colleagues.

Options

The 2018 TCPDP set out the range of actions being undertaken to reach the child poverty reduction targets set out in the Child Poverty (Scotland) Act 2017. If no actions were taken, it is estimated that one in three children in Scotland would grow up in poverty by 2030, damaging society and the economy.^[18]

The options we currently have in relation to amending FFP regulations are as follows:

1. Do nothing – Leave the FFP as they are currently and not make any changes. – This would mean we fail to deliver on the ministerial commitment to roll SCP out to older children.

2. Proceed with The Social Security (Miscellaneous Amendment and Transitional Provision) (Scotland) Regulations 2022.

Benefits of amending FFP policies

The automation of Early Learning Payment and School Age Payment awards was seen as something which could help overcome some of the accessibility issues which make delivering advice and support more difficult in island and remote rural areas. Auto-award can also remove barriers for those who are not aware of their entitlement, those who do not speak English as a first language, and ensures low income families receive their entitlement.

Social security payments have wider benefits of boosting local economies as result of spend in local shops and businesses, supporting responsible social behaviours and positively impacting health outcomes.

Providing new exceptions to the general rule that an individual is only entitled to the higher Pregnancy and Baby Payment when they are applying in respect of their first child, will support potentially vulnerable groups of people, such as refugees and domestic abuse survivors forced to leave the home and positively impact upon the economy with the additional spend.

Widening the definition of a kinship carer for all FFP, updating the meaning of surrogacy for BSG and BSF and removing the condition that the child is not looked after by the local authority in residential care for BSG could increase eligibility - leading to additional spend in the economy.

Expanding the eligibility criteria for SCP will ensure that more families can benefit from the payment and will contribute to reducing overall child poverty in Scotland, which is part of the Scottish Government’s strategic aims. Increasing the value of the payment will provide greater financial support to eligible families and positively impact upon the economy with the additional spend. The other amendments to the Scottish Child Payment regulations will ensure we can provide additional support where there is a death of a child. This will help provide additional support at a time where families will be particularly vulnerable.

Sectors and groups affected

The FFP aim to provide support to low income families and families living in poverty, including marginalised and seldom heard groups. It is envisioned that by giving families additional funds, which can be spent on any number of essential or non-essential items such as food, childcare, travel etc., there will be a positive effect on wellbeing within deprived communities. This could further extend to money being spent in local economies thereby creating a more stable environment for businesses. The expected expenditure on the FFP are set out in the SFC forecasts.^[19]

A further positive economic impact has been the creation of employment opportunities with Social Security Scotland as a result of the FFP.

Eligibility

We started paying SCP to eligible families with children under the age of 6. We are now introducing amendments to extend eligibility to those with a child aged between 6 and 15. The qualifying benefits for SCP are:

• Child Tax Credit
• Universal Credit
• Income Support
• Pension Credit
• Working Tax Credit
• Income-based Jobseeker’s Allowance
• Income-related Employment and Support Allowance

BSG provides support to low income families with a pregnant woman and/or young child or children who are in receipt of a qualifying benefit. The qualifying benefits are the same as for SCP, with the addition of Housing Benefit. Under 18s are automatically entitled to BSG without the need for a qualifying benefit. This is also true for 18 and 19 year olds who are still dependent on someone who is either receiving benefits for them or is a kinship carer for them.

BSF provides support to low income families with a pregnant woman and/or young child or children. The qualifying benefits are as follows:

• Child Tax Credit, if not in receipt of Working Tax Credit – relevant income must be less than £17,005 per year
• Universal Credit – income from working must be less than £660 a month, after tax and National Insurance
• Income Support
• Pension Credit
• Child Tax Credit and Working Tax Credit – relevant income must be less than £7,920 per year
• Income-based Jobseeker’s Allowance
• Income-related Employment and Support Allowance
• Housing Benefit – relevant income must be less than £328 a week

Pregnant women who are under 18 and their partners are automatically entitled to BSF, without the need for a qualifying benefit. This is also true for parents who are under 18 and have a child who is under 1. Where a pregnant women is under 18 and her or her partner are in receipt of BSF they continue to be eligible for BSF without the need for a qualifying benefit once the pregnant woman turns 18 up until their child turns one.

There is a 12 week period during which people would stay on Social Security Scotland’s systems and would not have to reapply for SCP or BSF, instead they can notify Social Security Scotland if they subsequently come back into a qualifying benefit or child responsibility benefit entitlement.

Application process

We have committed to a multi-channel approach for the FFP as with the other devolved benefits with applications taken online, over the phone or on a paper form. We have already introduced a single application form to apply for the FFP to make it easier to apply and increase uptake. The introduction of auto-award for the Early Learning and School Age Payment for eligible families in receipt of SCP will build on this work and ensure more families receive their entitlement.

In addition, local delivery is the face to face channel of Social Security Scotland, providing pre-claim support to clients accessing the Scottish benefits system.

Entitlement to other Social Security support

It has been agreed with the UK Government through the Fiscal Framework that any new benefits or discretionary payments introduced by the Scottish Government, which provide additional income for a recipient, will not affect their entitlement elsewhere in the UK benefit system.

Scottish Firms Impact Test

There has been extensive engagement with a wide range of stakeholders throughout FFP development to understand the impact of the policy on the third sector and the groups they represent. We have held one to one meetings and attended a number of member events including with: the Scottish Campaign for Welfare Reform; the Social Security Consortium in Scotland; the Poverty Alliance; Inclusion Scotland; Fife Gingerbread; Who Cares?; CEMVO Scotland; religious groups; Engender; Women’s Aid; and Shakti Women’s Aid.

The Cabinet Secretary for Social Security and Older People hosted a stakeholder roundtable in January 2020 in relation to SCP, which was an open discussion with key stakeholders allowing them to ask questions about the policy and delivery of the benefit. The Cabinet Secretary for Social Justice, Housing and Local Government held an additional roundtable with stakeholders in August 2021.

It is expected that the rollout of SCP to families with children aged between 6 and 15 could cause additional requests for information and support from existing advice services. In recognition of the work that they do the Scottish Government has committed in its second Benefit Take up Strategy^[20] to provide £10 million of funding over this parliamentary term to increase access to advice services to maximise incomes, tackle the poverty penalty and improve wellbeing. This will be in accessible settings, for example schools, with a focus on families.

As part of this, the Scottish Government has committed £3.17 million over two years to placing money advisors in up to 150 GP practices in some of Scotland’s most deprived areas. Evidence has shown that money and welfare advisors in health centres often reach people who do not engage with traditional advice services.

Local delivery is the face to face channel of Social Security Scotland, providing pre-claim support to clients accessing the Scottish benefits system. The Local Delivery service is made up of specially trained Client Support Advisers who are based within every local authority area in Scotland including our Island communities. The Local Delivery Relationship Leads have built close relationships with Local Authorities, Health & Social Care and Third Sector agencies creating opportunities to co-locate agency staff and deliver a service that is tailored to meet the differing needs of each individual area.

For example, in the Western Isles Local Delivery are co-located with Comhairle nan Eilean Siar, in Orkney with Skills Development Scotland, in Shetland with the NHS and in Argyll & Bute they have community outreach locations with LiveArgyll. Clients can book an appointment to meet with an adviser at a venue within their local community or at their home and are also able to request video call or telephone appointments.

Competition Assessment

The Scottish Government does not believe that the amendments to the FFP will have an adverse impact on the competitiveness of Scottish companies or the third sector within Scotland, the UK, or elsewhere in Europe or the rest of the world. These benefits do not directly or indirectly limit the number of suppliers, nor do they limit the ability of suppliers to compete or reduce suppliers’ incentives to compete vigorously. Additionally, the Scottish Government have reached out to advice groups such as Child Poverty Action Group, One Parent Families Scotland and Citizens Advice Scotland and does not expect there to be any significant impact on the operational business of local authorities or health boards as a result of introducing the amendments to the Five Family Payments.

Any procurement required to support the administration of the Five Family Payments will be subject to the Public Contracts (Scotland) 2015 Regulations^[21] and the Procurement Reform (Scotland) Act 2014^[22] which together provides a national legislative framework for sustainable public procurement. The Regulations and the Act provide the statutory foundations for the Scottish Model of Procurement.

Will the measure directly or indirectly limit the number or range of suppliers? No

Will the measure limit the ability of suppliers to compete? No

Will the measure limit suppliers’ incentives to compete vigorously? No

Will the measure limit the choices and information available to consumers? No

Business forms

No new business forms will be brought in with the implementation of the proposed amended regulations. It will be possible to make applications online, by post or by telephone. Support from Social Security Scotland will also be available in all local authority areas through their Local Delivery service.

Consumer Assessment

The Scottish Government does not believe that the amendments to the Five Family Payments regulations will have an adverse impact on children/families or any other consumer either within Scotland, the UK, or elsewhere in Europe or the rest of the world. Social Security Scotland has published Our Charter,^[23] detailing the service clients can expect from them.

Does the policy affect the quality, availability or price of any goods or services in a market? No

Does the policy affect the essential services market, such as energy or water? No

Does the policy involve storage or increased use of consumer data? No

Does the policy increase opportunities for unscrupulous suppliers to target consumers? No

Does the policy impact the information available to consumers on either goods or services, or their rights in relation to these? No

Does the policy affect routes for consumers to seek advice or raise complaints on consumer issues? No

Digital Impact Test

Does the measure take account of changing digital technologies and markets?

We have committed to a multi-channel approach for the FFP as with the other devolved benefits with applications taken online, over the phone or on a paper form. This offers options for those with digital access and for those who find it more challenging.

Will the measure be applicable in a digital / online context?

FFP will be available in a digital/online context, including an online application channel. Guidance material advising on who may or may not be eligible will also be available online. Further information on the FFP policies are already available on the Scottish Government website. This allows potential applicants to access information on the benefits quickly and easily. We will also ensure information is available in other formats for people who may find it difficult to access information online.

Is there a possibility the measure could be circumvented by digital / online transactions?

We recognise the value of automating SCP payments, and considered whether a data feed from DWP to SG confirming client eligibility digitally and payments being made automatically was feasible. However, automation of this sort is complex, time-consuming, and technically challenging – and simply isn’t possible without affecting our planned delivery schedule. We are committed to exploring the feasibility of automated payments after the full roll out of the under 16s payment.

We will be auto-awarding the Early Learning and School Age Payments elements of the BSG as a result of the amended regulations.

Alternatively, will the measure only be applicable in a digital context and therefore may have an adverse impact on traditional or offline businesses?

No, the service will be available by telephone, paper form and face to face through the Social Security Scotland Local Delivery service.

If the measure can be applied in an offline and online environment will this have any adverse impact on incumbent operators?

No adverse impacts have been identified on incumbent operators at this stage of the impact assessment.

Legal Aid Impact Test

Someone who has applied for SCP or BSG but whose application has been unsuccessful will be able to ask Social Security Scotland for a re-determination without having to supply further evidence. Social Security Scotland will, however, take into consideration any new evidence provided. The timescales for requesting a re-determination and the time period allowed for the agency to complete the re-determination is set out in the original regulations for SCP^[24] and BSG.^[25] If the individual is dissatisfied with the re-determination outcome, they can appeal to the First-tier Tribunal. Advice and assistance is available to enable solicitors to provide initial advice on social security appeals. Assistance in the form of representation is not available, but this is available for an onward appeal to the upper tribunal dependent on eligibility. Legal assistance through the statutory scheme of Advice and Assistance, and Advice by Way of Representation will continue. Any impact on legal aid of the extension of eligibility for SCP to children aged between 6 and 15 is expected to be minimal, as this is a top up benefit so individuals will already be engaged with the benefits system prior to applying for SCP.

In the majority of cases those applying for BSG will also be in receipt of a qualifying benefit, except for those under the age of 18 or those who are 18 or 19 and named on someone else’s benefit claim. As those aged under 18 do not require a qualifying, reserved benefit to be eligible for BSG, we have sought and received agreement from the UK Government that for BSG Pregnancy and Baby Payment, individuals who are under 18 and have no recourse to public funds are able to receive support. We expect the numbers receiving BSG Pregnancy and Baby Payment who have no recourse to public funds to be small.

In the majority of cases, those applying for BSF will also be in receipt of a qualifying benefit. However, pregnant women who are under 18 and their partners are automatically entitled to BSF, without the need for a qualifying benefit. This is also true for parents who are under 18 and have a child who is under 1. Where a pregnant women is under 18 and her or her partner are in receipt of BSF they continue to be eligible for BSF without the need for a qualifying benefit once the pregnant woman turns 18 up until their child turns one. Furthermore, pregnant women who are 18 or 19 and a dependent can be eligible on the basis of the person responsible for them receiving a qualifying benefit. Where this is the case, the pregnant woman’s partner is also eligible. Parents of an eligible child who are 18 or 19 and a dependent, can similarly be eligible on the basis of the person responsible for them receiving a qualifying benefit.

All applicants to BSF have the ability to request a review of any decision made on their claim and details of this are laid out in Social Security Scotland operational guidance. This is not included in BSF legislation and should have no further impact on legal aid. We have enacted legislation to ensure that SCP is disregarded as income when applying for legal aid.

Enforcement, sanctions and monitoring

We have not been made aware of any new burdens for businesses, local government or the third sector generated by these amended regulations in regards to enforcement, sanctions or monitoring.

The Scottish Government has established the independent Scottish Commission on Social Security (SCoSS) who have provided independent scrutiny of the amended FFP regulations.^[26] The Scottish Government will publish a response to the report and their recommendations.

The Social Security (Scotland) Act 2018^[27] places a duty on the Scottish Ministers to report annually to the Scottish Parliament on the performance of the Scottish Social Security System during the previous financial year. The report is to describe what the Scottish Ministers have done in that year to meet the expectations on them set out in the Charter.

We have established a stakeholder take-up reference group. This group comprises key individuals and organisations representing academic, third-sector, and local authority interests. It is designed so that members can bring their experience, expertise, and extensive networks to bear in supporting the implementation and monitoring of the first Benefit Take-up Strategy, as well as feeding into the development of the second and subsequent strategies.

Audit Scotland will monitor and report on the delivery of the social security system, including Social Security Scotland.

We have also committed to reviewing the FFP during the course of the current TCPDP^[28] (2022-2026) and will continue to work closely with stakeholders, and people with experience of the benefits, to ensure that support is targeted at those families that need it most.