Social Security in the 2021 election manifestos

Summary

• There is consensus amongst the parties in a couple of areas relating to social security, and therefore we can be assured that changes will occur in the next parliament

• Extension of the Scottish Child Payment by £10 a week to £20 looks certain over the next parliamentary term, although quite when this will happen is a little more uncertain.

• There is also consensus that changes are required to improve financial support for unpaid carers with newly devolved powers over Carer’s Allowance/Assistance. The pledges made in the manifestos will rub up against the reserved benefit system, and there is yet to be agreement on particular issues around clawback and spillovers that need to be resolved.

• The other tranche of newly devolved benefits relating to disability assistance get less air time in the manifestos, with the notable exception of Scottish Labour who want to look at changes to eligibility and rates paid.

• Whilst four out of five parties talk up a Universal Basic Income, there are no specifics as to what form it would take and what it would be there to do and due to limited powers there is unlikely to be meaningful progress towards it in the next parliamentary term.

• However, a setting of some sort of minimum income floor, enabled through the social security system, has support of the SNP plus some of the other parties. Lack of detail makes it difficult to understand the implications of this. But it is certainly one to watch.

• There are plenty of other suggestions in the mix, with many of the (likely) opposition parties suggesting a number of policies:

• • Both the Scottish Liberal Democrats and Scottish Labour want to look at a further top up for children in low income families where there is a disability in the household
  • Scottish Labour suggest fund that will offer grants to over 75s to cover the cost of their TV licence, and a £100 rebate for every family paid for out of Scottish Water reserves.
  • The Scottish Greens have a number of proposals that would undo some of the Westminster policy changes in recent years, including ending the two child limit and ending the benefit cap.
  • The Scottish Conservatives would like a top-up benefit for veterans who are in receipt of Universal Credit and a special support system for students who in receipt of benefits.
  • The SNP promise to replace the current Cold Weather Payment with a guaranteed Winter Heating Assistance payment.

• Overall, there is an interesting range of policies pledged in these manifestos, with all parties making use of new powers recently devolved to the Scottish Parliament. More may emerge as the parliamentary term progresses, and indeed more will probably need to if Scotland is to meet its legislative targets around Child Poverty in 2023/24 particularly given the challenges ahead for the labour market.

Introduction

The last parliamentary term saw the groundwork for the newly devolved social security benefits being laid with the ‘safe and secure’ transition the main catchphrase of the Scottish Government over that time.

Scotland has powers over a number of disability and carer benefits (see our previous briefings here and here) as well as powers to top-up existing reserved benefits and to create entirely new benefits.

There have been delays in the transition, in part because a new top-up benefit the Scottish Child Payment was brought in. But over the next five years, all will become operational in Scotland.

These manifestos give us a chance to see what each party are proposing to do with these new powers.

Agreement on the Scottish Child Payment

The Scottish Child Payment is a recent addition to the social security landscape. It works as top-up to those already entitled to Universal Credit, or the so called ‘legacy’ income related benefits that Universal Credit replaced.

It is currently set at £10 a week, and although currently only children under 6 are eligible, this will roll out to all children under 16 over the next couple of years.

The Scottish Child Payment is expected to have a direct and significant impact on the levels of child poverty in Scotland. Which is just as well as there are a set of statutory targets that the next government will be required to meet by 2023/24.

In recognition of this, all parties have agreed to a doubling of the Scottish Child Payment in the next parliament. Scottish Labour say it will be in place by the end of 2022, but the other parties are less specific. A Scottish Conservative costing document suggested that it would be in the final year of the parliament, although they have subsequently said it would be introduced earlier if the funds were available.

And available funds will be a big issue given that the cost is the region of £180m a year. It’s a big commitment. But unfortunately, even that won’t be enough to meet the 2023/24 targets alone. For that we would have need a quadrupling the Scottish Child Payment by 2023/24. See here for more analysis on that.

Promises on Carer’s Allowance

All of the parties say something about support for unpaid carers, with apparent agreement that the current arrangement needs improvement. Changing the current arrangements is not as straightforward as one might first assume, and some of the changes prosed by the parties’ veer into unchartered fiscal framework waters.

First a recap. Carer’s Allowance is an income replacement benefit for those who cannot work due to caring responsibilities of at least 35 hours a week. It is paid, across the UK at £67.60 a week.

In Scotland, we also have the Carer’s Allowance Supplement, introduced in the last parliament, which tops up Carer’s Allowance to an equivalent of Job Seekers Allowance (£74.70 a week) via two  lump sum payments.

Carer’s Allowance has been devolved to Scotland, and in the next parliament, it will become Carer’s Assistance. Current plans are for it to be paid at the level of Carer’s Allowance and Carer’s Allowance Supplement combined. There is however some ominous wording in the SNP manifesto stating that this is will be achieved ‘provided we can guarantee UK benefit clawbacks won’t leave carers worse off’. This is still an issue that needs to be resolved with the UK Government.

A quick detour: disregards, spillovers & the fiscal framework

Whilst Carer’s Allowance counts as income for the purposes of claiming other benefits, the Carer’s Allowance Supplement is currently disregarded. This means that money paid out through the supplement isn’t clawed back if people are drawing on other mean-tested support.

However, how this will all work under Carer’s Assistance is yet to be worked through. If Carer’s Assistance incorporates the additional amount currently paid under the Carer’s Allowance Supplement, it is not yet agreed whether DWP will disregard that additional amount or not.

If there was clawback, then under the Fiscal Framework the Scottish Budget should be reimbursed from the ‘spillover’ effect, but we are yet to see this mechanism tried and tested in practice. It also still leaves the carer worse off.

Any changes to eligibility are even more fraught with issues.

As explained in this paper, receipt of Carer’s Allowance means that people automatically become eligible for additional payments in other, reserved, benefits. Any change in eligibility in Scotland therefore means more people become eligible for these other benefits, which would also count as a spillover effect. As the Scottish Government state in the above paper, there would need to be agreement with DWP on how they treat this in their systems – agreement that doesn’t yet appear to have been reached.

This particular nettle may need to be grasped at some point unless eligibility is to remain identical to the DWP Carer’s Allowance. Although much simpler, it rather undermines the point of devolving it in the first place.

Back to the manifestos

The Greens and the Lib Dems both seek permanent uplifts to the payment. The Scottish Greens pledge to increase Carer’s Allowance Supplement to £105 a week means (after double checking this with the party) that the top-up would bring the total amount paid under the allowance + supplement to £105 per week. This would mean a tripling of Carer’s Allowance Supplement, costing somewhere in the region of £100m.

The Scottish Liberal Democrat’s approach is to campaign for a UK wide £1000 increase to Carer’s Allowance. This obviously gets round the issue of how to pay for it in Scotland as if the UK Government implemented it then money would flow to Scotland to allow a similar increase to be made to Carer’s Allowance (or Carer’s Assistance once that is in place). Issues around clawback would still need to be reckoned with.

The Scottish Conservatives take a different approach, and rather than increase the payment, they would introduce a taper rate to remove the cliff edge currently in place once some earns £128 per week. £1 over this means loss of the whole Carer’s Allowance (plus supplement). Scottish Labour also want this cliff-edge removed and the threshold increased, and they want people who care for people for more than 20 hours included (it is currently 35 hours).

Although these sound like reasonable demands, anything which increases eligibility will need careful navigation (as explained above) through the Fiscal Framework quagmire.

The SNP are proposing a one-off double payment of Carer’s Allowance Supplement in December 2021 costing around £30m for 2020/21 alone. Their one-off top up would happen under the current set-up, before the Carer’s Assistance starts to operate. Other proposed changes however would form part of the new system.

They propose an additional £10 per week for anyone caring for more than one person. The Scottish Greens want to look at the feasibility of this as well as introducing a new payment for those not able to claim Carer’s Allowance due to the overlapping benefit rule which limits payments received if carers also claim other benefits, including the state pension.

The SNP would also like Carer’s Allowance to be paid for 12 weeks, rather than the current 8 weeks, after the death of a cared one. The Liberal Democrats go further on this, and state that support should be in place for up to 6 months. This change to eligibility may be small enough to be waved through by DWP without recourse, but no guarantees.

Disability assistance – most parties keeping their powder dry

None of the parties, with the notable exception of Scottish Labour, are yet suggesting any significant changes to the systems of disability assistance which have been devolved to Scotland. We are awaiting results to a consultation that closed shortly before the pre-election period began, plus all parties are suggesting some sort of reform around adult social care, so parties may feel it is best to wait and see.

There are some pledges. Scottish Greens and the Scottish Conservatives both say they would have a review of disability assistance. The SNP, the Scottish Liberal Democrats and Scottish Labour say they would remove repeated reassessments for those with conditions unlikely to change.

Away from assessments, there are genuine questions around whether the amounts paid through disability assistance is adequate for their purpose of compensating for additional costs of disability. Research by Scope showed that shortfall between what is currently paid, and what would need to be paid to cover all additional costs, is in the region of £500 a month.  Under current plans, the rates available are not due to change on transfer to Scotland.

Scottish Labour are the only party that say they will take this on in the next parliament. They also plan to take on some of the rules around eligibility for support to make it available to more people.

The Liberal Democrats do say they will consider a top up to social security payments for families where either a child or a parent is disabled. This would most likely be a top-up to a means tested benefit rather than through disability assistance, recognising that those people with a disability are more at risk of poverty than the general population due to barriers to work. Scottish Labour promise the same, and say it will be at least £5 a week. They also want a Disability Poverty Target, with interim goals and funding to ensure aims are met.

A cross party consensus emerging on Universal Basic Income….albeit an inappropriately vague one

Four out of the five main parties have made positive noises around a universal basic income. As we’ve previously described, basic income comes in many flavours.

It could herald in a world where the end of means testing makes incentives to work much clearer for all, boosting the labour market, but with a floor that no one would fall beneath. Or, alternatively, it could mean a world where people are given enough to live on, without having to work, thus eliminating poverty and tackling tricky questions over a future of automation where there might be fewer jobs around. As should be clear, the level of payment required in the latter would be much higher than in the former.

This, and the issue over how it would be funded, remain big questions that political parties do not address in their manifestos, making their positive noises open to interpretation from those who, in reality, want very different things from a basic income. Universal Basic Income is not an idea without merit, but it would be helpful if parties actually described which issue they are using it to tackle.

There is then, obviously, the issue that Scotland does not currently have the powers to implement a basic income. The Scottish Liberal Democrats bring out their trusty workaround by saying they’d work with the UK Government to implement it.  The Scottish Greens would negotiate with the UK Government to secure the powers to implement it. Scottish Labour say they support the continuation of trials of universal basic income but don’t add anything more than that at this stage.

The SNP, conceding that it is unlikely that the UK Government will be amenable, punt basic income into a post-independence future. In the interim, they want to explore a Minimum Income Guarantee. The Greens seem to be in support of this with their own suggestion of a Minimum Income Standard as well as Scottish Labour, although neither offer clues as to what level it would be set at.

In tone, the SNP appear to be aligned more to the idea of giving people enough to live on (“enough money to live a dignified life”) which implies levels above what is available under the current social security system. This would, of course, be expensive to implement if it was to apply to everyone (recent IPPR Scotland analysis based on their version of a minimum income guarantee work set the price tag at around £7bn).  With income tax rises ruled out over the next parliament, exactly how such a change would be funded is not addressed. The implication here is perhaps that little could change in the next parliament given funding challenges.

Without more detail, it is – disappointingly – impossible to get a grasp on what this would cost or the impact it might have.

Best of the rest

The Scottish Greens scoop the prize for the longest list of social security measures. Within their list is ending the benefit cap (FAI estimate of cost c. £10m), removing the two-child limit (c. £40m), increase all Best Start Grants and the School Clothing Grant by £100 (c. £20m). All these, along with the doubling of the Scottish Child Payment, would make a dent in child poverty more in keeping with, but still a distance away from, the 2023/24 target.

Scottish Labour want a fund that will offer grants to over 75s to cover the cost of their TV licence, and a £100 rebate for every family paid for out of Scottish Water reserves.

The Scottish Conservatives would like a top-up benefit for veterans who are in receipt of Universal Credit (costed at £8m) and a special support system for students who in receipt of benefits. Labour also have a pledge on supporting income for students on low income.

The SNP have a promise to increase the Best Start Food vouchers to £4.50 (a 25p increase from current amounts) and extend eligibility to more people, which they think will cost around £20m. They also want to replace the current Cold Weather Payment, that pays out when temperature limits are breached, by a £50 Winter Heating Payment, at a cost estimated by then of £20m.

The Scottish Greens, Scottish Labour and the SNP mention a review of the Scottish Welfare Fund, reflecting concerns over consistency across the country. They all also mention the issues faced by those with No-Recourse to Public Funds due to their immigration status, although given lack of Scottish Parliament powers on this, their proposed solutions can only be work-arounds to get support to people through local authority services rather than changes to the Home Office enforced rules. Scottish Labour would also like a review of discretionary housing benefit.

Conclusion

One reading of the manifestos could give the impression that we are in line for revolutionary change to social security with Universal Basic Income apparently on the horizon. However, anything more specific than ‘we think UBI is a good idea at some point’ eludes this election debate.

Close to reality, some sort of minimum income floor enabled by the social security system seems to have support amongst a few parties, including the SNP. Again, details are scant, but this distant cousin of UBI is one to watch over the next parliamentary term.

Interestingly, there is clear consensus emerging on some issues across all the parties at this election: children in low income families need more money and support for unpaid carers need to be improved. Consensus is even more specific on support for children, with £10 a week the agreed amount. Quite why there is such specific agreement on the amount remains undisclosed.

One area where there is less agreement is on disability assistance. Given only Scottish Labour have put forward concrete plans on this, it is unlikely (bar a big surprise on election day) that much will happen here over the next parliamentary term.

It is the smaller parties which are most likely to be called upon in the event of an SNP minority government, and hence it is worth looking at where there is agreement between SNP and the Greens or Lib Dems. The overlapping agreement here on elements of Carer’s Allowance (including some issues relating to eligibility) suggests we will have fiscal framework issues to resolve over the next five years.

There probably will need to be more done on child poverty through social security over the next parliament beyond what the SNP has so far set out (unless the labour market somehow transforms into one where in-work poverty reduces significantly, which is unfortunately unlikely by 2023/24). The ideas raised by Liberal Democrats, the Greens and Scottish Labour around extra payments may be part of that tool kit, but we may need even more than that. Unlike UBI, this can’t be kicked into the long grass or wait until the next parliamentary term.