Benefits of devolution

Following the report of the Smith Commission for further devolution of powers to the Scottish Parliament, part 3 of the Scotland Act 2016 altered the reservation of social security schemes. The Scottish Parliament gained competence to legislate for disability, industrial injuries and carer’s benefits, along with powers to create additional social security benefits and to replace existing benefits with new assistance.

Users of existing benefits legislation often complain that it is complex and fragmented. To understand how a current benefit operates, a reader usually has to refer to a mix of primary and secondary legislation, which interacts in complex ways. The bill has an opportunity to start with a blank page, to try to make the law more accessible. So it describes types of assistance to be given. It provides a framework, which will be filled in later by regulations. It leaves it to those regulations to tell, in one place, the whole story of how a person qualifies for assistance and what they qualify for.

Social security charter and principles

Before coming to types of assistance and their delivery, the bill provides for a Scottish social security charter. This will set out what is expected from the Scottish ministers and persons who seek assistance. It will reflect seven fundamental principles, including that dignity of individuals is to be at the heart of the Scottish social security system and that the system is to be designed with the people of Scotland. There will be an annual report on how the system is performing and the charter will be reviewed regularly.

The bill then sets out a rights-based approach to assistance. Social security is a human right and essential to the realisation of other human rights. That is another of the seven principles. It follows that the Scottish ministers have a duty to determine what assistance an individual is entitled to be given by them.

The individual will be told, in all cases, of the reasons for that determination. If unhappy with it, the individual can ask for their entitlement to be re-determined and can then appeal to tribunals and to the courts.

Types of assistance

What types of assistance will be provided? Ultimately, this is for the Scottish Parliament to decide, but the bill proposes that the Scottish ministers will provide eight types. In addition, local authorities will continue to provide discretionary financial assistance to help tenants (known as discretionary housing payments and available to persons receiving housing benefit or universal credit towards their rent).

The eight types of assistance, and current benefits provided by the Department for Work & Pensions (DWP) that they will replace, are:

• Carer’s assistance, which will be provided to an individual who cares for another individual who has a disability (DWP carer’s allowance).
• Cold-spell heating assistance, which will be provided to an individual to help meet heating costs in periods of cold weather (DWP cold weather payments).
• Winter heating assistance, which will be provided to an individual to help meet heating costs in winter (DWP winter fuel payments).
• Disability assistance, which will be provided to a disabled individual on account of the impact of a physical or mental disability or a terminal illness (DWP disability living allowance, personal independence payments, attendance allowance and severe disablement allowance).
• Early years assistance, which will be assistance to an individual who has costs related to having a child in their family. This will include people who are expecting to have a child (DWP Sure Start maternity grant).
• Employment-injury assistance, which will be provided to an individual who has had an injury or contracted a disease through employment (DWP industrial injuries scheme).
• Funeral expense assistance, which will be assistance to an individual to help meet funeral costs (DWP funeral payment).
• Short-term assistance, which is assistance the Scottish ministers will provide on a short-term basis, for example to maintain payments to an individual, in certain circumstances, who is pursuing an appeal against a decision to reduce their ongoing entitlement to assistance (no DWP equivalent).

Detailed rules for these types of assistance will be set out in regulations, including the rules for eligibility and entitlement. Regulations will set the amount of assistance and provide for uprating of amounts. It is expected this legislation will come into force within the current parliamentary session, by April 2021. Ministers will develop this detail in collaboration with others, including persons who currently receive similar benefits from DWP and those who represent such persons.

Benefits that remain reserved

Although up to 1.4 million people in Scotland will receive the existing benefits that are being devolved, those benefits are still only part of the overall social security system. The £2.9 billion that will be spent on devolved benefits is less than 15% of total social security spending in Scotland. There are no plans to devolve:

• Universal credit, which is currently being rolled out across Great Britain and replaces jobseeker’s allowance, income-related employment support allowance, income support, working tax credits, child tax credits, and housing benefit
• State pension and pension credit
• Contributory employment support allowance
• Child benefit
• Bereavement benefits
• Maternity and paternity pay.

The benefit cap, which limits the total amount of benefit that many people aged 16 to 64 can receive, remains reserved to Westminster. However, persons who receive carer’s allowance or most of the devolving disability benefits are exempt from the effect of the cap. This exemption is expected to continue after Scottish assistance starts to be paid.

Other devolved provision

The Scotland Act 2016 gives devolved competence to top up reserved benefits, subject to some limits. The bill will give the Scottish ministers the power to make regulations providing for such top-up payments.

The bill also provides for twice-yearly supplementary payments to persons receiving DWP carer’s allowance so that the annual amount received by carers will match the amount payable to persons entitled to DWP jobseeker’s allowance. This is to be provided as a supplement, rather than a top-up payment because, although for now carer’s allowance continues to be delivered by DWP, the Scottish Parliament has competence to legislate for carers’ benefits. That means carer’s allowance has ceased to be a “reserved benefit”, for the purposes of the power to top up benefits.

There is no reference in the bill to the new powers of Scottish ministers to make regulations providing for payment of the housing cost element of universal credit direct to landlords, or altering the frequency of payments of universal credit. That is because these powers need no bill provision. The 2016 Act provides fully for them, and also for a power to alter how the housing cost element of universal credit is determined and calculated. Regulations have recently been made to enable eligible Scottish tenants to choose to have direct payments, and to have twice-monthly payments rather than the default monthly ones. These regulations come into force in October 2017.

Next steps

The bill will now undergo parliamentary scrutiny, giving MSPs and stakeholders the opportunity to review and consider it and suggest how it might be improved. Commencement is expected from May 2018 at the earliest, with a Scottish social security agency being set up for delivery of individual benefits.

DWP will continue to deliver the devolving benefits until the agency is in place. Although the 2016 Act says what welfare benefits are being devolved, it does not provide rules to determine who is a “Scottish welfare recipient” and which persons should continue to look to DWP for assistance rather than the Scottish ministers. Rules will need to be developed, and provided for in regulations, so that there is clarity over what happens when people move within Great Britain, and to Northern Ireland (which already has a devolved social security system).

The outcome of Brexit negotiations will also need to be considered. Broadly, EU law does not dictate the content of national welfare provision, but does provide for social security co-ordination, so that EU citizens who exercise their freedom of movement within the EU (and some other states) are not affected adversely. This is not only about assistance to non-UK nationals who relocate to the UK. For example, some existing benefits can remain payable by DWP to UK nationals who are living abroad. Brexit negotiations will influence what provision is needed for persons who move to and from Scotland.

Achieving a successful transition of the 10 devolving benefits that are currently delivered by DWP requires the biggest and most complex programme of change which the Scottish Government has undertaken. There will be a phased approach to commencement of the bill, in which the overriding priority will be to ensure the safe and secure transfer of assistance to those who are entitled to it.