Social Security for Scotland: Benefits being devolved to the Scottish Parliament June 215
Introduction The purpose of this paper is to provide an initial examination of the benefits which are set to be devolved to Scotland under the Smith Commission recommendations. This analysis will be used to help inform our discussions on how best to take advantage of the new powers coming to Scotland. The paper is structured in the following way: Brief background to the benefit system and the Smith Commission proposals; Examination of the reserved/devolved split of benefit expenditure; High-level statistics on each of the benefits to be devolved including expenditure data, caseload time series, breakdown by age and gender and key characteristics of claimants where the data is available; and Analysis of the combinations of some of these benefits that individuals in Scotland currently receive. 2
Background to the benefit system The benefit system currently in place in Scotland is distributed across a number of recipient groups. The majority of these benefits are currently reserved to the UK Government, with the exception of the Council Tax Reduction and Scottish Welfare Fund which were localised and devolved respectively to the Scottish Government from April 213. Benefits for people out of work Income Support In Work Credit & Return to Work Credit Job Grant Jobseekers Allowance Benefits for elderly people Financial Assistance Scheme Pension Credit State Pension State Pension Transfers TV Licences Winter Fuel Payments Benefits for people who are ill or disabled Attendance Allowance Carer s Allowance Disability Living Allowance Employment & Support Allowance Incapacity Benefit Industrial Injuries Personal Independence Payment Severe Disablement Allowance Specialised Vehicles fund Statutory Sick Pay Vaccine Damage Payments Benefits for families with children Child Benefit Child Tax Credit Guardians Allowance Maternity Allowance Statutory Maternity Pay Benefits for people on low incomes Council Tax Reduction Discretionary Housing Payments New Deal & Employment Programme Allowances New Enterprise Allowance Scottish Welfare Fund Social Fund (regulated) Working Tax Credit Housing Benefit Other Bereavement benefits Christmas bonus Universal Credit Other small benefits such as child trust fund etc. Source: Expert Working Group on Welfare, Re-thinking Welfare: Fair, Personal and Simple. 3
The Smith Commission The Smith Commission was tasked with providing recommendations on potential financial, welfare and taxation powers that could be devolved to Scotland, following the independence referendum. Their Heads of Agreement, published on 27 November 214, detailed a number of recommendations in relation to social security. These included the recommendation that the Scottish Parliament be given complete autonomy to determine the structure and value of a range of powers over disability, and devolution of the components of the regulated social fund. In addition, the Scottish Parliament should be given the power to make administrative changes to Universal Credit and to vary the housing cost element. The Commission also made clear recommendations that the Scottish Parliament be given powers to create new benefits in areas of devolved responsibility, and top-up reserved ones. For carers, disabled people & those who are ill Currently part of the Regulated Social Fund Other Attendance Allowance (AA) Cold Weather Payment (CWP) Discretionary Housing Payments (DHP) Carer s Allowance (CA) Disability Living Allowance (DLA) Personal Independence Payment (PIP) Funeral Payment (FP) Sure Start Maternity Grant (SSMG) Winter Fuel Payment (WFP) Industrial Injuries Disablement Benefit (IIDB) Severe Disablement Allowance (SDA) Source: The Smith Commission, Report of the Smith Commission for further devolution of powers to the Scottish Parliament. 4
Benefit expenditure in Scotland 213/14 In 213/14, 25.2 billion was spent on benefits in Great Britain, of which 17.5 billion (8.5 per cent) was spent on individuals in Scotland. The Commission s proposals would devolve around 2.6 billion (14.6 per cent) of Scottish benefit expenditure to the Scottish Parliament. These figures exclude nearly 4 million of expenditure on the Council Tax Reduction Scheme and Scottish Welfare Fund which are already devolved to the Scottish Parliament. If they are included, total benefit expenditure in Scotland in 213/14 was around 17.9 billion. Note: figures may not sum due to rounding Sources: DWP Outturn and Forecast: Autumn Statement 214, DWP benefit expenditure by Region 1996/97 to 213/14, HMRC Tax Receipts between England, Wales, Scotland & Northern Ireland, Scottish Welfare Fund Statistics: 213/14, Council Tax Reduction: Caseload and Expenditure 213/14. 5
Benefit expenditure in Scotland 213/14 The size of expenditure on each benefit to be devolved varies considerably. Nearly 1.5 billion was spent on Disability Living Allowance in 213/14, accounting for almost 6% of total expenditure on the benefits to be devolved. This is in comparison to the 1 million spent on Cold Weather Payments in 213/14. Source: DWP benefit expenditure by local authority from 2/1 to 213/14 6
Benefit to be devolved to Scotland Group Benefit Primary Purpose Attendance allowance To help with personal care for individuals aged 65 or over with a physical or mental disability. For carers, disabled people & those who are ill Carer s Allowance Disability Living Allowance Personal Independence Payment Industrial Injuries Disablement Benefit Severe Disablement Allowance To help an individual look after someone with substantial caring needs. To be eligible the individual must be 16 or over and spend at least 35 hours a week caring for them. Help if your disability or health condition means one or both of the following are true: You need help looking after yourself You have walking difficulties DLA is closed to new working age claimants and being replaced by PIP. Helps with some of the extra costs caused by long-term ill-health or disability for individuals aged 16 to 64. Replacement for DLA for working age individuals. For individuals who are ill or disabled as a result of an accident or disease caused by work or while you were on an approved employment training scheme or course. For working age individuals who are unable to work due to illness or disability. SDA is closed to new entrants Currently part of the Regulated Social Fund Other Source: www.gov.uk Cold Weather Payment Funeral Payment Sure Start Maternity Grant Winter Fuel Payment Discretionary Housing Payments A payment for individuals on certain benefits when the temperature is either recorded as, or forecast to be, an average of zero degrees Celsius or below over 7 consecutive days. For individuals on low income and needing help to pay for a funeral they are arranging. A one off payment of 5 to help towards the costs of having your first child for individuals who are in receipt of certain benefits. A tax-free payment to help pay for heating bills if you were born on or before 5 July 1952 (Current SPA for women). Additional help for those in receipt of Housing Benefit and having difficulty meeting their rent payments. Paid at the discretion of the LA. 7
Disability Living Allowance in Scotland Nov 214 DLA provides help for an individual if their disability or health condition means one or both of the following are true: They need help looking after their self or have walking difficulties. DLA is closed to new claimants and being replaced by PIP. In 213/14 1.5bn was spent on DLA in Scotland, 1.7% of the GB total which is more than Scotland s population share (8.6%). DLA caseload steadily increased between May 22 and May 213 and has started to fall as a result of the introduction of PIP. Number of claimants (Thousands) 4 3 2 1 May-2 May-3 May-4 May-5 May-6 May-7 May-8 May-9 May-1 334,73 individuals received DLA in Nov 214 May-11 May-12 May-13 May-14 Gender split 51% 49% The majority (81%) of claimants have been receiving DLA for over 5 years, with 14% receiving DLA for between 2 to 5 years. 52% of all DLA claimants are aged 5 to 75. Number of claimants (Thousands) 5 4 3 2 1 <5 5 to <11 11 to <16 16-17 18-24 25-29 3-34 35-39 4-44 45-49 5-54 55-59 6-64 65-69 7-74 75-79 8-84 85-89 9+ Age range There are a wide range of qualifying conditions for DLA with arthritis and learning difficulties being the most common. Chest Disease 3% Cerebrovascular Disease 4% Heart Disease 4% Back Pain 4% Other 31% Neurological Diseases 4% Arthritis 17% Learning Difficulties 12% Psychosis 8% Psychoneurosis 8% Disease Of The Muscles, Bones or Joints 5% 76% of DLA claimants are in receipt of both the Mobility and Care elements of DLA. Sources: DWP benefit expenditure by local authority from 2/1 to 213/14 and DWP tabulation tool. Note: caseload data relates to cases in payment. Care Award Rate Mobility Rate Higher Lower Nil Higher 17% 7% 1% Middle 16% 16% 3% Lower 12% 9% 6% Nil 1% 3% % 8
16-17 18-24 25-29 3-34 35-39 4-44 45-49 5-54 55-59 6-64 65 and over Number of claimants Daily Living Award Rate Number of claimants Personal Independence in Scotland January 215 PIP helps with some of the extra costs caused by long-term ill-health or disability for individuals aged 16 to 64. It is also replacing DLA for working age individuals. Actual PIP expenditure data for Scotland is not available. However, it is estimated that in 213/14 around 17m was spent on PIP in Scotland based on Scotland s proportion of the GB caseload. PIP was introduced in June 213 to Scotland for new claims. Its caseload will continue to increase as DLA claimants are reassessed onto PIP. 3, 25, 2, 15, 1, 5, - 34,562 individuals received PIP in January 215 Gender split 54% 46% Only 9% of current PIP claimants have been reassessed from DLA. 9% of current PIP claimants are classed as being terminally ill. 73% of all PIP claimants are aged 4 to 64. 7, 6, 5, 4, 3, 2, 1, - There are a wide range of qualifying conditions for PIP with psychiatric disorders being the most common. Respiratory disease; 5% Musculoskel etal disease (regional); 11% Other; 6% Neurological disease; 1% Malignant disease; 14% Psychiatric disorders; 33% Musculoskel etal disease (general); 18% Cardiovascula r disease; 3% 58% of PIP claimants are in receipt of both the mobility and daily living elements of PIP. Mobility Award Rate Enhanced Standard Nil Enhanced 28% 11% 16% Standard 6% 13% 19% Nil 2% 6% % Sources: DWP Outturn and Forecast: Autumn Statement 214 and DWP Stat-Xplore. Note: caseload data relates to cases in payment. 9
Number of claimants (Thousands) Attendance Allowance in Scotland Nov 214 Number of claimants (Thousands) May-2 May-3 May-4 May-5 May-6 May-7 May-8 May-9 May-1 May-11 May-12 May-13 May-14 AA provides help with personal care for individuals aged 65 or over with a physical or mental disability. In 213/14 481m was spent on AA in Scotland, 9% of the GB total which is slightly more than Scotland s population share (8.6%). AA caseload has generally declined since reaching a peak in November 29 of 148,3 claimants. 175 15 125 1 75 5 25 13,15 individuals received AA in Nov 214 Gender split 65% 35% 5% of all claimants have been receiving AA for over 5 years, with a quarter (25%) receiving AA for between 2 to 5 years. There are a wide range of qualifying conditions for AA with arthritis being the most common. 63% of all AA claimants are aged over 8. 4 3 2 1 65-69 7-74 75-79 8-84 85-89 9+ Cerebrovasc ular Disease 6% Chest Disease 7% Disease Of The Muscles, Bones or Joints 7% 62% of AA claimants receive the higher rate of care, meaning they require both day and night care or are terminally ill. Age range 1 Sources: DWP benefit expenditure by local authority from 2/1 to 213/14 and DWP tabulation tool. Note: caseload data relates to cases in payment. Other 31% Arthritis 32% Dementia 8% Heart Disease 9%
Number of claimants (Thousands) Aug-3 Jun-4 Apr-5 Feb-6 Dec-6 Oct-7 Aug-8 Jun-9 Apr-1 Feb-11 Dec-11 Oct-12 Aug-13 Jun-14 Number of claimants (Thousands) Carers Allowance in Scotland Nov 214 CA is provided to help an individual look after someone with substantial caring needs. To be eligible the individual must be 16 or over and spend at least 35 hours a week caring for them. In 213/14 182m was spent on CA in Scotland, 8.7% of the GB total which is slightly more than Scotland s population share (8.6%). CA caseload has been increasing steadily over the last decade. 7 6 5 4 3 2 1 61,61 individuals received CA in Nov 214 Gender split 69% 31% The majority (66%) of claimants have been receiving CA for over 2 years, with 38% receiving CA for over 5 years. Over half (58%) of all CA claimants are aged 4 to 59. 1 8 6 4 2 42% of CA claimants are entitled to CA but do not receive a CA payment. This is because they are also in receipt of another benefit, such as State Pension, JSA or ESA,which provide a higher level of income. Unclaimed 42% Claimed 58% Age range Sources: DWP benefit expenditure by local authority from 2/1 to 213/14 and DWP tabulation tool. Note: caseload data relates to cases in payment.
Number of claimants (Thousands) Aug-99 Aug- Aug-1 Aug-2 Aug-3 Aug-4 Aug-5 Aug-6 Aug-7 Aug-8 Aug-9 Aug-1 Aug-11 Aug-12 Aug-13 Aug-14 Number of claimants (Thousands) Severe Disablement Allowance in Scotland Nov 214 SDA is for working age individuals who are unable to work due to illness or disability. It was clsoed to new entrants and the provision replaced by Incapacity Benefit in April 21, which is now replaced by Employment and Support Allowance. In 213/14 91m was spent on SDA in Scotland, 1.6% of the GB total which is more than Scotland s population share (8.6%). SDA caseload is falling as it is closed to new claimants. 5 4 3 2 1 16,59 individuals received SDA in Nov 214 Gender split 56% 44% Individuals aged 35 to 44 account for just over a quarter (26%) of all SDA claimants. 4.5 4 3.5 3 2.5 2 1.5 1.5 16-17 18-24 25-34 35-44 45-49 5-54 55-59 6-64 65 and over Age range There are a wide range of qualifying conditions for SDA with mental and behavioural disorders being the most common. Congenital Malformations, Deformations and Chromosomal Abnormalities; 6% Diseases of the Musculoskeletal system and Connective Tissue; 6% Diseases of the Nervous System; 1% Other; 11% Unclassified symptoms etc; 23% Mental and behavioural disorders; 44% Sources: DWP benefit expenditure by local authority from 2/1 to 213/14 and DWP tabulation tool.
22 Q2 22 Q4 23 Q2 23 Q4 24 Q2 24 Q4 25 Q2 25 Q4 26 Q2 26 Q4 27 Q2 27 Q4 28 Q2 28 Q4 29 Q2 29 Q4 21 Q2 21 Q4 211 Q2 211 Q4 212 Q2 212 Q4 213 Q2 213 Q4 214 Q2 New Industrial Injuries Disablement claims New Industrial Injuries Disablement Claims Q1 21 Q2 21 Q3 21 Q4 21 Q1 211 Q2 211 Q3 211 Q4 211 Q1 212 Q2 212 Q3 212 Q4 212 Q1 213 Q2 213 Q3 213 Q4 213 Q1 214 Q2 214 Q3 214 Industrial Injuries Disablement claims in payment Industrial Injuries Disablement Benefit in Scotland Q3 214 IIDB is for individuals who are ill or disabled as a result of an accident or disease caused by work or while they were on an approved employment training scheme or course. It is estimated that in 213/14 83m was spent on IIDB in Scotland, around 9.5% of the GB total which is slightly more than Scotland s population share (8.6%). This estimate is based on the proportion of Industrial Injuries Benefits expenditure spent on IIDB at the GB level. The number of IIDB claims in payment has been slowly decreasing since 21. 35, 3, 25, 2, 15, 1, 5, 27,35 individuals received IIDB in Q3 214 Gender split 15% 85% The number of new claimants has been on a general downward trend since 22. 3,5 3, 2,5 2, 1,5 1, 5 Osteoarthritis of the knee included in the regulations 53 new IIDB claims in Q3 214 Diseases are the most common qualifying condition for IIDB accounting for 57% of all new claims. However, accidents account for 62% of all new working age claims. 35 3 25 2 15 1 5 Diseases Accidents Reduced Allowance Qualifying condition Working age Pension age Sources: DWP benefit expenditure by local authority from 2/1 to 213/14, DWP Industrial Injuries Disablement Benefit quarterly statistics. 13
Discretionary Housing Payments in Scotland 214/15 DHPs provide additional help for those in receipt of Housing Benefit and having difficulty meeting their rent payments. It is paid at the discretion of the Local Authority. In 214/15 51m was spent on DHPs in Scotland. A significant proportion of this is likely to have been to counter the effects of the Bedroom Tax. In 214/15 there were 117,832 DHP awards in Scotland. The average DHP award in Scotland in 214/15 was 429, up from 335 in 213/14. The Scottish Government provided most of the funding for DHPs in 214/15 SG funding; 35m, 7% UKG funding; 15m, 3% Between 1 April 214 and 31 March 215: Local Authorities received a total of around 132, applications for DHPs; LAs made determinations on around 13, DHP applications, although some of these determinations may have been on applications which commenced prior to 1 April 214; 118, DHP awards were granted during the period. This figure is likely to include a sizeable number of cases affected by the RSRS, where local authorities have continued to make up their shortfall in weekly rent through the use of DHPs; The total value of these awards across Scotland was 5.5 million. Source: Scottish Government Discretionary Housing Payments in Scotland: 1 April 214 to 31 March 215. 14
Winter Fuel Payment in Scotland 213/14 WFP is a tax-free payment to help pay for heating bills if an individuals was born on or before 5 July 1952 (current State Pension Age for women). In 213/14 186m was spent on WFP in Scotland, 8.7% of the GB total which is very slightly more than Scotland s population share (8.6%). WFP caseload has remained broadly flat at around 1.1 million claimants since 29/1 1,86,8 individuals received a WFP in 213/14 Gender split WFP is payable to individuals over the female state pension age who have been residing in the UK during a specified week in September of that year. A fifth of claimants are aged over 8. The rate of WFP an individual receives depends on their age and circumstances. Sources: DWP benefit expenditure by local authority from 2/1 to 213/14, DWP Winter Fuel Payment: caseload and household figures 213 to 214. 15
Benefits currently part of the Regulated Social Fund 213/14 Cold Weather Payments (CWP), Funeral Payments (FP) and Sure Start Maternity Grants (SSMG) are all benefits currently administered through the UK Government Regulated Social Fund. Cold Weather Payment are payments for individuals on certain benefits when the temperature is either recorded as or forecast to be an average of zero degrees Celsius or below over 7 consecutive days. Funeral Payments are for individuals on low income and needing help to pay for a funeral they are arranging Sure Start Maternity Grant is a one off payment of 5 to help towards the costs of having your first child for individuals who are in receipt of certain benefits. Estimates of expenditure on CWP, FP and SSMG in Scotland are based on Scotland's proportion of GB expenditure on DWP benefits. GB Scotland CWP 8m 1m FP 44m 4m SSMG 37m 3m It should be noted that expenditure on Cold Weather Payments are extremely volatile due to the payment being dependant on weather conditions. The chart below shows the changes in GB expenditure on cold weather payments from 24/5 to in 213/14. Source: DWP Outturn and Forecast: Autumn Statement 214. 16
Number of claimants Benefit Combinations in Scotland Nov 214 SP only ESA SP and PC/IS JSA only IS/PC only WA only IB only IS/PC and IB ESA and DLA SP and AA DLA only SP and DLA IS/PC, SP and AA IS/PC, SP and DLA CA only IS/PC and CA CA and SP IS/PC, DLA and SDA IS/PC, CA and SP DLA, SDA IB and DLA IS/PC, IB and DLA SDA and IS/PC SDA only Other Combination Individuals can be in receipt of more than one benefit at any one time. As a result there will be interactions between any devolved and reserved benefits which may impact on individuals behaviours. Limited information is available on the combinations of benefits individuals receive with DWP data providing some data on their benefits, although with notable exceptions like Housing Benefit. This interaction is highlighted by 34% of claimants of the main DWP benefits claiming a benefit combination which includes a devolved benefits. State Pension only claimants account for the largest proportion (42%) of all claimants. 7, 6, 5, 4, 3, 2, 1, Sources: DWP tabulation tool Combinations containing only reserved benefits Combinations containing devolved benefits
Sources Department for Work and Pensions (DWP), Benefit expenditure by local authority 2/1 to 213/14. [Accessed 5 March 215] https://www.gov.uk/government/statistics/benefit-expenditure-and-caseload-tables-214 DWP, Benefit expenditure by region 1996/97 to 213/14. [Accessed 5 March 215] https://www.gov.uk/government/statistics/benefit-expenditure-and-caseload-tables-214 DWP, DWP Tabulation Tool. [Accessed 5 March 215] http://tabulation-tool.dwp.gov.uk/1pc/tabtool.html DWP, Industrial Injuries Disablement Benefit: quarterly statistics. [Accessed 5 March 215] https://www.gov.uk/government/collections/industrial-injuries-disablement-benefit-quarterly-statistics DWP, Outturn and forecast: Autumn Statement 214. [Accessed 5 March 215] https://www.gov.uk/government/statistics/benefitexpenditure-and-caseload-tables-214 DWP, Stat-Xplore. [accessed 5 March 215] https://stat-xplore.dwp.gov.uk/ DWP, Winter Fuel Payment: caseload and household figures 213 to 214, 17 September 214. https://www.gov.uk/government/statistics/winter-fuel-payment-caseload-and-household-figures-213-to-214 HMRC, Disaggregation of HMRC Tax Receipts: statistics table. [Accessed 5 March 215] https://www.gov.uk/government/statistics/disaggregation-of-hmrc-tax-receipts Expert Working Group on Welfare, Re-thinking Welfare: Fair, Personal & Simple, 4 June 214. http://www.gov.scot/publications/214/6/776 Scottish Government, Discretionary Housing Payments in Scotland: 1 April 213 to 31 March 214 [Accessed 5 March 215] http://www.gov.scot/topics/statistics/browse/social-welfare/dhp/dhp31mar214 Scottish Government, Scottish Welfare Fund Statistics: 213/14, 15 July 214. http://www.gov.scot/topics/statistics/browse/social- Welfare/swf/SWF213214 Scottish Government, Council Tax Reduction: Caseload and Expenditure, Scotland, 213/14, 24 June 214. http://www.gov.scot/publications/214/6/5122 The Smith Commission, Report of the Smith Commission for further devolution of powers to the Scottish Parliament, 27 November 214. https://www.smith-commission.scot/ UK Government, www.gov.uk 18
List of abbreviations AA Attendance Allowance SP State Pension CA Carer s Allowance SPA State Pension Age CWP Cold Weather Payment SSMG Sure Start Maternity Grant DHP Discretionary Housing Payments WA Widow s Allowance DLA Disability Living Allowance WFP Winter Fuel Payment DWP Department for Work & Pensions ESA Employment & Support Allowance FP Funeral Payment IB Incapacity Benefit IIDB Industrial Injuries Disablement Benefit IS Income Support JSA Jobseeker s Allowance PC Pension Credit PIP Personal Independence Payment SDA Severe Disablement Allowance 19
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