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Scottish Economy

Election 2021 issue brief: Disability and carer benefits for children and pensioners

During the last parliamentary term, elements of the social security system were devolved to the Scottish Parliament. Among the most notable benefits over which powers have been devolved are disability and ill health benefits, many of which will be fully transferred and administered by Social Security Scotland during the next parliamentary term.

Our recent policy briefing has already set out the current framework and expected changes to working age disability and ill health benefits that are devolved in Scotland. This briefing has a distinct focus on disability benefits that apply to children and those of pension age, for whom separate benefits apply.

The transition to Scottish administered disability benefits is ongoing, with plans to replace some existing benefits moving into a pilot stage shortly. However, the Scottish Government have already announced at least an overview of their intentions on how these new benefits will be administered.

With an outline already in place, this presents an opportunity for these benefits to feature as an area of more detailed policy debate at this election. In this briefing, we set out the key devolved disability and ill health benefits for children and pensioners in Scotland. Our focus is on how the benefits themselves work, rather than the funding complexities and the interactions with the fiscal framework. See here for a previous FAI briefing looking at this.

Attendance allowance / Pension age disability payment

How it works at the moment

Those above state pension age who require help or supervision with their personal care or to stay safe at home are currently eligible to claim Attendance Allowance. More than 125,000 people in Scotland benefit from Attendance Allowance.

Attendance Allowance is devolved and paid for by the Scottish Budget following a transfer of resources. The Scottish Fiscal Commission forecast spend of £560m in Scotland in 2021-22. The DWP are continuing to administer Attendance Allowance in Scotland on behalf of the Scottish Government over a transition period.

As well as being available to those with a physical disability, this benefit is also available to those with a mental health condition, learning disabilities or a sensory impairment, such as deafness or blindness. However, claimants must have needed care or supervision for at least six months to be eligible for Attendance Allowance.

Attendance Allowance is non-means tested and does not count against other benefits, such as the benefit cap. It is paid at two rates, which for 2021/22 will be:

  • Higher rate: £89.60 per week
  • Lower rate: £60.00 per week

This will represent a rise of 45p and 30p per week respectively compared with 2020/21 rates, or a 0.5% increase. The higher rate is paid to those who require help or supervision during the day and at night, whereas the lower rate is paid to those who require help or supervision during the day or at night.

Attendance Allowance does not include a mobility component as is the case with PIP for working age claimants.

A number of pensioners who receive disability assistance remain on Disability Living Allowance. It is now closed to new pensioner claimants, but those born before 8 April 1948 are still able to claim it[i].

Chart 1: Attendance Allowance cases paid in Scotland, August 2020

Attendance allowance cases paid Scotland Aug 2020

Source: DWP Stat-Xplore

What is expected to change over the next Parliament?

The Scottish Government have announced plans to replace Attendance Allowance with Pension Age Disability Payment (before October 2020 this was known as Disability Assistance for Older People).

The new devolved benefit will attempt to reduce the level of face-to-face assessments. This is with the hope of easing the stress and anxiety felt by disabled people that can often accompany face-to-face assessments. Evidence to support a claim will primarily come from other sources, such as reports from medical practitioners.

The current plan is for Pension Age Disability Payment to pay the same rates as the existing Attendance Allowance and there are no plans to bring in an mobility component despite this being called for by respondents to the Government consultation on disability assistance in 2019[ii].

Pension credit

Pension Credit is a reserved benefit paid to those above state pension age who live on low incomes. Additional Pension Credit is available to severely disabled people in receipt of Attendance Allowance, the middle or higher rate care component of Disability Living Allowance (see below), PIP or Armed Forces Independence Payment. In this case, additional payments of £66.95 per week are made.

Whilst Pension Credit is a reserved benefit, the Scottish Government has top up powers that could be used to change the payments made to disabled people above state pension age in a similar way to the Scottish Child Payment, which is legislated as a top up to UC.

Disability living allowance (child) / Child disability payment

How it works at the moment

Children under the age of 18 with a disability or ill health in Scotland are eligible for Disability Living Allowance (DLA) for children. As with Attendance Allowance, this has been devolved but is currently being administered in Scotland by DWP on behalf of the Scottish Government. The Scottish Fiscal Commission forecast expenditure of £260m in 2021-22.

Up until 2020, children had to move on to PIP when they turned 16, but from the 1st April 2020, this no longer applied in Scotland with children able to stay on DLA until they are 18[iii].

A child is eligible if:

  • they need more care or supervision than other children of the same age who aren’t disabled; or
  • they have mobility issues or difficulty walking outdoors in unfamiliar places compared with children of the same age who aren’t disabled.

Around 45,000 cases of DLA (child) were paid in Scotland in August 2020, the latest month for which data is available.

Similar to Attendance Allowance, DLA (child) is not means tested. It is broken down into two components – the care component and the mobility component. The first relates to the care and supervision a child needs, the second relates to a child’s ability to walk and access unfamiliar places.

Care component
The care component pays three rates:

  • Higher rate: £89.60 per week
  • Middle rate: £60.00 per week
  • Lower rate: £23.70 per week

The higher rate applies to children who need frequent care and supervision throughout the day and night or have been diagnosed as terminally ill. The middle rate applies to children who require care and supervision throughout either the day or night. The lower rate applies to children who need care or supervision throughout some part of the day (at least an hour). The rates have increased by around 0.5% in cash terms on 2020/21.

Mobility component
The mobility component pays two rates:

  • Higher rate: £62.55 per week
  • Lower rate: £23.70 per week

The higher rate is given to children who have severe physical difficulties that make it dangerous for them to walk alone. This could, for example, include children who can’t walk, are deaf or blind, or have a severe learning disability. The lower rate is given to children who have difficulties walking around unfamiliar places.

Chart 2: DLA (child) cases paid in Scotland, August 2020

DLA child cases paid Scotland Aug 2020

Source: DWP Stat-Xplore

Changes made during the last Parliament

As already mentioned, children who turn 16 are now able to stay on DLA until they are 18 and this will be the case with the replacement benefit.

A new Child Winter Heating Assistance has also been brought in. This is paid automatically to parents of children who receive the higher rate of DLA’s care component. Payment is annual and equates to £200.

What is expected to change over the next Parliament?

Child disability payment will replace DLA (child) in Scotland, with pilots planned in Dundee City, Perth and Kinross and the Western Isles council area starting in July 2021 following roll out across Scotland for new claims from autumn 2021[iv]. This will be the first application-based disability benefit to be rolled out by Social Security Scotland.

The application process will be different from the DWP system which requires a claim in writing. The Scottish Social Security Agency will give multi-channel options for applying and provision for more support to help parents and carers through the process[v].

The current plan is similar to the existing benefit, with no deviation from the rates set in the rest of the UK.

Universal credit

Universal credit (UC) remains a reserved benefit paid by the DWP. Unlike the other benefits set out in this briefing, UC is means tested. It comprises different elements, some of which are dependent on personal circumstances. This is why UC is relevant to this briefing, as there are two disabled child additions:

  • The disabled child addition pays £128.89 per month for each child in receipt of DLA or PIP (see above).
  • The severely disabled child addition pays £402.41 per month if the child receives the higher rate of DLA’s care component (see above), PIP’s enhanced rate for daily living, or is registered blind.

As stated above regarding Pension Credit, the Scottish Government has top up powers that could enable it to change the payments to parents of disabled children, despite Universal Credit as a whole being a reserved benefit.

Young carer grant

How the social security system supports carers is of course important too. In Scotland, one estimate puts the number of child or young adult carers at 93,000, although this is based on a small sample size (the Scottish Health Survey). The latest census put the figure at 37,000[vi].

The Young Carer Grant is paid to 16, 17 or 18 year olds in Scotland who care for someone in receipt of disability benefits for an average of 16 hours per week over a 3 month period. Since its launch in October 2019, it has supported more than 2,900 eligible applications at a cost of close to £1m[vii]. It pays an annual grant of £308.15.

Conclusion

All parties in the election will want to support people who are disabled or have ill health, especially children and pensioners. Disability often incurs additional costs of living and for parents of disabled children and disabled people above working age, the social security system is often a significant element of their income. For disabled children and pensioners, the generosity of the social security system tends to play a key role in determining their living standards.

With the roll out of new powers over disability benefits for children and pensioners progressing in the next parliament, and a challenging long term financial landscape with an ageing population, big decisions lie ahead. The election will be a chance for parties to set out their vision for the above benefits that have such a significant impact on many peoples’ living standards.

[i] Social Security Scotland (2020) ‘Summary statistics’
https://www.socialsecurity.gov.scot/asset-storage/production/downloads/CAStoOct2020-AA2CCA2CDLA2CSDAtoaug-v4.pdf

[ii] Scottish Government (2020) ‘Disability Assistance for Older People: position paper https://www.gov.scot/publications/scottish-government-position-paper-mobility-component-disability-assistance-older-people-daop/

[iii] Scottish Government news release (2020)
https://www.gov.scot/news/16-year-olds-will-no-longer-need-to-apply-for-pip-in-scotland/

[iv] Child Poverty Action Group (2021) ‘Disability Assistance’
https://cpag.org.uk/scotland/welfare-rights/scottish-benefits/disability-assistance

[v] Scottish Government (2020) ‘Child Disability Payment: position paper’
https://www.gov.scot/publications/scottish-government-position-paper-child-disability-payment/

[vi] Young carers: review of research and data, Scottish Government (2017)
https://www.gov.scot/publications/young-carers-review-research-data/pages/2/

[vii] Social Security Scotland news release (2021)
https://www.socialsecurity.gov.scot/news-events/news/young-carer-grant-pays-out-more-than-860k-since-launch

Authors

Knowledge Exchange Associate at the Fraser of Allander Institute

Emma is a Knowledge Exchange Fellow at the Fraser of Allander Institute