- Document Cover
- About the Scottish Commission on Social Security
- Summary of recommendations and observations
- Executive summary
- 1. Introduction
- 2. Inflation
- 3. Scottish Child Payment
- 4. Adult Disability Payment
- 5. Earnings thresholds
- 6. Approach to scrutiny
- Annex A: Overview – powers and constraints
- Annex B: Inflation of food and fuel costs
- Annex C: Scrutiny timeline
In 2019 the Scottish Government published its strategic approach to up-rating. This confirmed it would use the Consumer Prices Index (CPI) September rate of inflation to maintain the purchasing power of certain forms of assistance, in line with statutory requirements. Where there is no statutory duty, the Scottish Government can exercise discretion to up-rate other forms of assistance. In addition to up-rating, it can (various constraints permitting) choose to increase amounts by more than inflation. Every year it has used these annual regulations to make changes additional to just up-rating.
This year the September CPI rate was 10.1%. Scottish Child Payment has already been increased from £20 to £25; all other Scottish social security payments will be up-rated in April 2023 by the September CPI rate. Amendments to earnings limits used to determine entitlement to Carer’s Allowance and to child dependency increases payable to some Carer’s Allowance recipients are made in these regulations. As per the Agency Agreement between the Department for Work and Pensions and the Scottish Government, the Carer’s Allowance earnings limit increase replicates the changes made by the Department for Work and Pensions.
Assessing uprating Regulations through the lenses of the social security principles and applicable human rights obligations is not always straightforward because what is required to maintain or make improvements to support for an adequate standard of living and contribution to reducing poverty cannot be neatly captured by an average measure of price inflation.
SCoSS sees no reason at the current time to change from using the September CPI rate as the standard measure though we agree with the Scottish Government that alternatives should be kept under review. However, in October the CPI rate had risen to 11.1%, dropping to 10.5% in December. There is a risk that up-rating by 10.1% could mean a reduction in value by April 2023.
We welcome the increase to £25 per week, while noting the ‘cliff-edge’ implications should earnings increase just enough to disentitle a person from Universal Credit, causing SCP to be lost. There is also some ambiguity regarding what is the appropriate ‘relevant figure’ for the purposes of the up-rating report in regards to the Scottish Child Payment.
In its consumer price inflation reports the Office for National Statistics (ONS) has noted that costs of essentials including food and heating fuel have increased at higher rates than the CPI. The ONS has also reported that average wages across the UK have not risen at the same pace as the CPI. Although earnings thresholds for social security payments are increased as part of this up-rating process, this may not be at levels sufficient to avoid excluding individuals in need of support due to the disparity between wage increases and price inflation, particularly price inflation of essentials like food and heating fuel.
 This issue is discussed at length in SCoSS’s The Scottish Child Payment Regulations 2020 scrutiny report.