Welfare Reform (Further Provision) (Scotland) Act 2012: annual report 2016

4. New Social Security Powers for Scotland

4.1 Introduction

This chapter covers, in more detail, the new social security powers which will be devolved to Scotland following the Scotland Act 2016. Information is provided on the full list of 11 benefits which will be devolved, the principles underlying Social Security in Scotland and the progress made in relation to how social security will be delivered. New powers will give the Scottish Parliament and Government the opportunity to create distinct welfare policies in the area of devolved responsibility.

4.2 New Powers in the Scotland Act 2016

The Smith Commission was tasked with providing recommendations on potential financial, welfare and taxation powers that could be devolved to Scotland ^[60] . The Commission recommended that the Scottish Parliament be given complete autonomy to determine the structure and value of a range of powers over disability, ill health and caring benefits, and devolution of the components of the Regulated Social Fund.

The disability-related benefits to be devolved to the Scottish Parliament include Attendance Allowance, Carer's Allowance, Disability Living Allowance , Personal Independence Payments, Industrial Injuries Disablement Benefit and Severe Disablement Allowance. In addition, the following components of the Regulated Social Fund will be devolved - Cold Weather Payment, Funeral Payment, Sure Start Maternity Grant and Winter Fuel Payment. Discretionary Housing Payments are also to be fully devolved to the Scottish Parliament ^[61] .

In addition to these benefits, the Smith Commission recommended that the Scottish Government should be given the administrative power to vary elements of Universal Credit, including the housing cost element, and that the Scottish Parliament be given powers to create new benefits in areas of devolved responsibility, and to top-up reserved benefits.

Part three of the Scotland Act 2016 ^[62] has been enacted to implement these recommendations and the Scottish Government anticipates that it will begin to come into force during 2016. The Scottish Government intends to introduce a Social Security Bill in the first year of the Scottish Parliament. Timescales for delivering social security benefits in Scotland have yet to be formalised.

While the devolution and use of these powers will have implications for Scottish households, this is beyond the scope of this report.

4.3 Principles Underlying Social Security in Scotland

In 2015, the Scottish Government announced ^[63] that social security in Scotland will be based on the following five principles:

− Social security is an investment in the people of Scotland.
− Respect for the dignity of individuals is at the heart of everything we do.
− Our processes and services will be evidence-based and designed with the people of Scotland.
− We will strive for continuous improvement in all our policies, processes and systems, putting the user experience first.
− We will demonstrate that our services are efficient and value for money.

The principles reflect feedback the Scottish Government received from organisations who work across Scotland and with all areas of society, including children, carers, disabled people, ethnic minority groups and older people as well as the wider general public.

Underpinning these principles is the aim is to create a fairer society and to contribute to the wider Scottish Government goal of tackling poverty and inequality. In addition, short-term and long-term outcomes have been created to inform the development of social security and to evaluate its functions in the future ^[64] .

These principles, aims and outcomes will be used in an 'options-appraisal' which will identify and assess the viability of the options for the delivery for the social security system ^[65] .

4.4 Delivery of Social Security

In March 2016 the then Cabinet Secretary for Social Justice, Communities and Pensioners' Rights announced that a new agency, which will be directly accountable to Ministers, will be created to oversee the delivery of social security benefits in Scotland.

The decision to establish an agency was made following consultation with a range of stakeholders and from analysis of a number of delivery options carried out by the Scottish Government ^[66] . In further developing this work the Scottish Government is now considering how the agency will work in practice, including how services will be delivered to people. This will involve continuing to work in partnership with stakeholders and ensuring that decisions made are based on robust evidence, taking into account the financial affordability and economic value for money of the options being considered and whether proposals are achievable.

The first priority, throughout this programme of work, is to make sure there is a smooth transfer of benefits and that people continue to receive their payments on time and in the right amount. The Scottish Government aims to make changes as soon as practically possible, and once the powers and finances are made available. However, this will only be done when all the correct systems and processes are in place and a transition plan is agreed with the UK Government, to safeguard payments which are important to so many recipients.

4.5 New Powers - Commitments of the New Administration

The previous administration committed to introducing a number of new polices in Social Security, and the new administration (elected in May 2016) will continue to implement these ^[67] .

Create a Social Security Agency

The Scottish Government will establish an agency to oversee the administration of devolved benefits, ensuring the principles of fairness, dignity and respect are at its heart (see sections 4.2 and 4.3 for further information).

As part of the Fiscal Framework agreement between the Scottish and UK Governments, ^[68] the Scottish Government will receive £200 million to support implementation of new social security powers, with annual funding for on-going administration costs. The agency will be responsible for administering benefits worth £2.7 billion ^[69] .

Universal Credit Flexibilities

Universal Credit ( UC) will remain a reserved benefit. However, the Scotland Act 2016 will allow the Scottish Government to introduce flexibilities to how frequently UC payments are made and how the housing element will be paid.

The Scottish Government has announced ^[70] that it intends to give claimants the choice of having their payments made twice a month rather than once a month, as the Department of Work and Pensions ( DWP) plan. In addition, the Scottish Government has announced that it intends to give claimants the choice to have payment of the housing element made directly to landlords, where the claimant is renting from a social landlord.

Increase Carer's Allowance

The Scottish Government has announced it will use the new powers to improve the support offered to carers by increasing Carer's Allowance (£62.10 per week ^[71] ) to the level of Jobseeker's Allowance (£73.10 per week ^[72] ). This will result in, approximately, an extra £600 for carers each year.

Abolish the 'Bedroom Tax'

The Scottish Government has announced it intends to use its Universal Credit powers under the Scotland Act 2016 to effectively abolish the bedroom tax (see section 2.5).

Jobs Grant

The Scottish Government intends to introduce a Jobs Grant to help young people aged 16-24 who are returning to work after a period of six months unemployment. This will be a one-off payment of £100, or £250 for those who have children. This will be supplemented with free bus travel for a three month period.

Maternity and Early Years Allowance

The Scottish Government intends to replace the Sure Start Maternity Grant with an expanded Maternity and Early Years Allowance. This will increase payment on the birth of a first child from £500 to £600, restore payments for second and subsequent children of £300 and introduce payments of £250 for low income families at other stages in children's lives (when they begin nursery and when they start school).

Winter Fuel Payments

The Scottish Government intends to extend Winter Fuel Payment eligibility to families with severely disabled children.

Housing Benefit

The Scottish Government intends to restore entitlement to housing support for 18-21 year olds in Scotland.