The original draft regulations submitted to SCoSS for scrutiny contained provisions on ‘nil awards’: a person would have a live claim for a qualifying benefit even if their award were reduced to zero as a result of sanction.  Our report on these draft regulations noted that the relevant provisions did not specify whether someone with a nil award for another reason, but who technically had an open claim for a qualifying benefit, would be treated similarly, or whether a decision to retrospectively reduce an award of tax credits to zero would result in SCP received  during the same period being treated as an overpayment. The report recommended that the Scottish Government should clarify the circumstances in which a nil award of a qualifying benefit could confer entitlement to the SCP, ideally in the Regulations but, failing that, in Decision Maker Guidance.

The Scottish Government’s response to this recommendation stated: “The draft Regulations set out that a nil award of a qualifying benefit as a  result of sanctions can confer entitlement to the SCP (regulation 15(2) of the draft Regulations).” This response went some way towards addressing the recommendation.

The Scottish Government has subsequently clarified that the policy intent of the amending regulations is to ensure that only people who have a nil award of a qualifying benefit as a result of sanctions or as a result of deductions for liabilities will be eligible for the Scottish Child Payment. This approach is intended to ensure consistency with other low income benefits being delivered by Social Security Scotland, for example, best start grants. It means that a person would not be eligible for the Scottish Child Payment if they received a nil award of a qualifying benefit for any reasons other than sanctions or deductions for liabilities.

SCoSS welcomes this amendment. Better consistency across types of assistance is in line with the Charter commitment to make processes and systems as simple and clear as possible. The desirability of not increasing the complexity of the social security system without good justification also features in our scrutiny framework.  However, it is inherently complex to distinguish between an award that has simply ended and one that continues at a nil rate, and to distinguish the cause. It is a challenge to keep forms and communications simple and clear while still properly informing people of their entitlements and duties in more complex situations, and unnecessary barriers to applying must be avoided.

Recommendation 1 – We recommend that accessible guidance for decision makers and SCP applicants should provide full detail on complex situations where an award is continuing at a nil rate rather than simply ending.

In practice, it may be fairly uncommon for a sanction or deduction to reduce an SCP applicant’s qualifying benefit award to nil. More often people will be left with some amount of benefit in payment.

More common (until tax credits are replaced by universal credit) is the situation where a tax credits award is retrospectively reduced to zero.  The draft regulations make it clear that there is no entitlement to SCP in this situation, which means there is the potential for overpayments of SCP. We understand that processes for dealing with overpayments are still in development.

Recommendation 2 – We recommend that processes and guidance are clear about whether an overpayment of SCP that arises because of a retrospective nil award of tax credits would be recoverable in law or in practice.

The second issue addressed by the amending regulations concerns payment cycles.

Scottish Government officials provided SCoSS with a brief note (reproduced in Annex A) that explains the policy intent in more detail, and why legal correction is necessary. In essence, the Regulations as currently drafted mean that a payment for an additional child would be made on a recurring four-weekly cycle that may not align with the four-weekly payment cycle for the existing claim. However, existing systems are designed so that payments to a client for all their children are made on the same date every four weeks. The amending regulations therefore provide that new and existing claims will be paid on the same recurring date. This will apply regardless of the number of additional eligible children that the client may have. Again, the Scottish Government has explained that this approach is consistent with the functionality for best start payments, and is also consistent with user feedback that it has received.

The amending regulations provide for a short first payment period for a new claim that could be anything from one day to 27 days. We understand that the Scottish Government’s policy intention is for the first payment to be treated as a full week (or the full 2, 3 or 4 weeks as the case may be) even where the claim is effectively only for a part of a week. However, as the draft regulations currently stand, this is not clearly provided for. There is no specific provision for the initial payment to be made for a full week or full weeks; payment starts from whichever day the individual tells Social Security Scotland that they have another child.

We support the Scottish Government’s policy intention that initial Scottish Child Payments, in the situation described above, would be for full weeks rather than for a smaller number of days. We consider that such an approach:

• would provide simplicity, by avoiding the need for complex provisions on calculating daily rates;
• would align provisions for the start of awards with provisions relating to when awards end; in such cases there is always a whole week’s payment, never a part week;
• may achieve value for money, in line with social security principle 1(h), should the cost of transferring a payment to someone’s bank  account be greater than the value of, for example, one day’s payment (which would equate to £1.43).

Recommendation 3 – We recommend that the draft regulations be amended, in line with the Scottish Government’s policy intention, to ensure that the first payment for a new claim is paid for a full week or full weeks.

Scottish Government officials have stated that the proposed amendments on the payment cycle and on nil awards will not affect any other provisions in the SCP Regulations. However, we highlight one further issue that may also help to achieve better alignment across different types of assistance, which was one of the Scottish Government’s reasons for preparing these amending regulations. Specifically, we suggest that the draft regulations be amended to provide a definition of the term ‘sanctions’. While neither the current SCP or best start grants regulations define ‘sanctions’, we think it is preferable for a definition to be provided given that there are different kinds of sanctions. Usually, the term means a failure to comply with work-related requirements, however, a person may also be sanctioned for a benefit offence which can result in a reduced or nil rate of benefit.

Recommendation 4 – We recommend that the term ‘sanction’ be defined in the draft regulations, and that the Scottish Government should seek to align the meaning of this term across all relevant types of assistance.