£25 Increase For Scottish Child Payment Announced

Child poverty in Scotland is projected to fall to its lowest level in nearly 30 years as a result of the actions taken to date and commitments in the second Tackling Child Poverty Delivery Plan.

More than 60,000 fewer children could be living in relative poverty in 2023 compared to 2017, according to updated modelling.

Social Justice Secretary Shona Robison said a focus on long-term parental employment opportunities, strengthened social security and support to reduce household costs are at the heart of the new four year delivery plan, Best Start, Bright Futures.

In 2022-23 this work will be supported by investment of almost £113 million on top of funding already allocated to ongoing programmes.

Actions include:

• Significantly increasing employment services with the aim of supporting up to 12,000 parents to enter and progress in sustainable and fair work through actions taken over the life of the Plan, with initial investment of up to £81 million in 2022-23 in employability support for parents

• Increasing Scottish Child Payment from £20 to £25 when the benefit is extended to under 16s by the end of 2022. This means £1,300 of support per eligible child per year. It is five times more than originally asked for by campaigners and an investment of £671 million over the next two years

• Delivering a new Parental Transition Fund to tackle the financial barriers parents face in entering the labour market, particularly over the initial period of employment, with an investment of up to £15 million each year

• Taking immediate steps to mitigate the UK Government’s Benefit Cap as fully as possible within devolved powers, through Discretionary Housing Payments. This will support our priority families, in particular, who are disproportionately impacted by this policy

Ms Robison said:

“I am proud that our actions of the past four years, together with those set out in this plan, are projected to deliver the lowest level of child poverty in Scotland in 30 years.

“We are taking immediate steps to put cash in the pockets of families – tackling the cost of living crisis and helping to lift thousands of children out of poverty in Scotland.

“Our package of five family benefits for low income families, including the increased Scottish Child Payment, will be worth over £10,000 by the time a family’s first child turns 6, and £9,700 for second and subsequent children.

“That is a difference of more than £8,200 for every eligible child born in Scotland in comparison to England and Wales – highlighting the unparalleled support offered by this government to children across the early years.

“We will also build on our investment in employment support for parents, through new skills and training opportunities and key worker support to help reduce household costs and drive longer term change.

“Our national mission to tackle child poverty is already giving more children the best start and a bright future. We are determined to meet our ambitious targets set for 2023-24 and 2030 and beyond, so that no children in Scotland are living in poverty. We know there is not a silver bullet and this cannot be done overnight.”

Scottish Government Minister and Scottish Green Party Co-Leader Patrick Harvie said:

“This plan delivers on key commitments to tackle child poverty and inequality in the cooperation agreement between the Scottish Government and the Scottish Green Party.

“We welcome the actions being taken, particularly in mitigating the UK Government benefit cap and increasing the Scottish Child Payment which will provide major support to thousands of low income households.”

Background

Tackling Child Poverty Delivery Plan 2022-26 Best Start, Bright Futures

Social Justice Secretary Shona Robison statement to parliament on Tackling Child Poverty Delivery Plan 2022-26

Other actions in the plan to provide immediate support and break the cycle of poverty include:

• Enhancing ‘benefit in kind’ offers to parents around childcare, digital connectivity and transport to help increase employment opportunities and ease cost of living pressures

• Investing up to £5 million to identify a small number of Pathfinder areas in Scotland, working with partners to help support individual family needs

• Introducing reforms to improve quality and affordability in the rented sector, continuing to invest in affordable housing and working with housing associations to break the cycle of homelessness

The Scottish Government’s package of five family benefits for low income families, including the increased Scottish Child Payment, will be worth over £10,000 by the time a family’s first child turns 6, and £9,700 for second and subsequent children. This compares to less than £1,800 for an eligible family’s first child in England and Wales, and less than £1,300 for second and subsequent children.

Relative child poverty in Scotland was 24% in 2017-18, with an estimated 230,000 children living in poverty in that year. Current projections suggest 17% of children will be living in relative poverty in 2023-24, approximately 170,000, one percentage point below the statutory target of 18%.

The Child Poverty (Scotland) Act 2017 sets in statute four ambitious interim targets to be met in 2023-24, with final targets to be met by 2030. These are that:

• Fewer than 18% of children living in families in relative poverty in 2023-24, reducing to fewer than 10% by 2030.
• Fewer than 14% of children living in families in absolute poverty in 2023-24, reducing to fewer than 5% by 2030.
• Fewer than 8% of children living in families living in combined low income and material deprivation in 2023-24, reducing to fewer than 5% by 2030.
• Fewer than 8% of children living in families in persistent poverty in 2023-24, reducing to fewer than 5% by 2030.

Child poverty projections are based on the UKMOD microsimulation model, which is maintained, developed, and managed by the Centre for Microsimulation and Policy Analysis (CeMPA) at the University of Essex.

The model applies the rules of the tax and benefit system to a set of data based on the Family Resources Survey. This data is combined with economic forecasts, mainly from the Office for Budget Responsibility, to project incomes into future years. Estimated poverty rates are calibrated to the latest year of official poverty statistics. All modelling results rely on a range of assumptions and are subject to a degree of uncertainty, particularly when projecting into future years.