{"id":8682,"date":"2019-06-28T10:25:29","date_gmt":"2019-06-28T10:25:29","guid":{"rendered":"https:\/\/sceptical.scot\/staging\/?p=8682"},"modified":"2026-04-18T19:34:31","modified_gmt":"2026-04-18T19:34:31","slug":"scottish-child-payment-is-welcome","status":"publish","type":"post","link":"https:\/\/sceptical.scot\/staging\/2019\/06\/scottish-child-payment-is-welcome\/","title":{"rendered":"Scottish Child Payment is welcome"},"content":{"rendered":"\n

Yesterday started with a <\/strong>bleak assessment<\/strong><\/a> by the Child Poverty Action Group of the impact of ongoing welfare cuts \u2013 specifically how the two-child limit on support, which began to be implemented in 2017, is set to push 300,000 children into poverty. <\/strong><\/p>\n\n\n\n

But there was better news for Scottish parents later in the day, as the Holyrood-based government announced<\/a> a new \u2018Scottish Child Payment\u2019 for lower-income households.<\/p>\n\n\n\n

At \u00a310 a week\nper child under 16, for poorer families, that\u2019s \u00a3520 a year for one kid, and\n\u00a31,560 for families with three kids. This is a fairly big deal. For comparison,\nthe UK-wide Child Benefit is currently around \u00a314 a week per child (and \u00a321 for\nthe first child). The policy won\u2019t be fully rolled out until late 2022,\nunfortunately, but children under six at least will start receiving it by March\n2021.<\/p>\n\n\n\n

As part of the discussion on how to meet Scotland\u2019s child poverty targets<\/a>, there has been some reasonable debate about whether the government would opt for a universal payment, or a means-tested one. Given fiscal constraints and the pressing need to support low-income families who are bearing the brunt of ongoing UK-wide benefit cuts, the government has sensibly opted for the latter.<\/p>\n\n\n\n

\"\"<\/figure><\/div>\n\n\n\n

Eligibility for\nthe Payment will be based on receipt of other means-tested benefits, which in\nthe long-term will essentially means Universal Credit (UC). Given the structure\nof UC \u2013 which gets tapered away depending on your earned income, as shown below\n\u2013 this means that a couple with one child (and no rent, childcare or disability\ncosts) would for example be eligible for the Payment up to a post-tax income of\naround \u00a31,800 a month.<\/p>\n\n\n\n

In theory the Payment is almost equivalent to an increase in\nUC\u2019s per-child element (though without the two child limit). But, while simply\nusing UC to deliver this cash may have been the ideal solution on paper,\npracticalities and politics mean the new policy will be delivered separately.<\/p>\n\n\n\n

This does create\na couple of suboptimal features, however. At the limit of UC eligibility \u2013\naround \u00a322,000 a year in the example above \u2013 the new policy would introduce a\n\u2018cliff-edge\u2019, where a \u00a31 increase in income would lose a family \u00a310 a week per\nchild. So working more would not \u2018always pay\u2019, particularly for families with\nmany children. For example, a parent with three kids could lose almost \u00a31,600\nfrom a \u00a31 pay rise. The fact that the Payment is separate from UC will also\ncreate an extra step for claimants, who will need to actively apply \u2013 perhaps\nreducing take-up.<\/p>\n\n\n\n

It\u2019s worth\nnoting that for a family with one child this new Payment is also roughly\nequivalent to reversing the abolition of the family element of Tax\nCredits\/Universal Credit, which since April 2017 has begun taking over \u00a3500 a\nyear from poorer families. And as the new policy has no child limit, it helps\nundo some of the effects of the UK-wide two child limit, as highlighted\nearlier, though it is only a fraction of the full cut of up to \u00a33,000 a year\nper child.<\/p>\n\n\n\n

Overall, the new policy is very well targeted at reducing poverty and inequality in Scotland, as the distributional impact below shows. The vast majority (roughly 70 per cent) of the gains will go the poorest thirty per cent of the population.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

And there is a particular need for the Scottish government to\nreduce child poverty, given that it is legally required to do so by 2023-24. In\n2017-18, 24 per cent of Scottish children were living in relative poverty (i.e.\nin households with less than 60 per cent of the UK-wide median income). The\nChild Poverty (Scotland) Act 2017 requires that to be reduced below 18 per cent\nby 2023-24 and below 10 per cent by 2030-31 (among other targets).<\/p>\n\n\n\n

As shown in the\nchart below, we have previously projected<\/a> that\nnot only will the 2023-24 target not be met, but child poverty will actually\nrise rather than fall \u2013 driven by UK-wide welfare cuts like the benefit freeze,\ntwo child limit and family element abolition.<\/p>\n\n\n\n

Yesterday\u2019s announcement is forecast to reduce child poverty by 3 percentage points, or around 30,000 children. On the face of it, this does not look like enough to deliver against the 2023-24 target (let alone the 2030-31 one) \u2013 or even necessarily deliver an overall reduction relative to 2017-18 \u2013 though other policies such as the Best Start Grants<\/a> and the overall performance of the Scottish labour market relative to the rest of the UK will matter too. Nonetheless, the Scottish Child Payment is very welcome, and a significant step in the right direction.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

It is interesting to note that if this were a UK-wide policy,\nthe cost would be around \u00a33 billion. This is expensive, yes \u2013 but far less so\nthan, for example, spending \u00a310 billion on tax cuts that would only benefit the highest earners<\/a>, or cutting\ncorporation tax (yet again) to 12.5 per cent (at a cost of \u00a313\nbillion<\/a>).<\/p>\n\n\n\n

How the Scottish government plans to fund the \u00a3180 million policy remains to be seen. But after years of cuts to UK social security, it is a pleasant change to see significant new efforts to reduce child poverty. As we move into a\u00a0new era<\/a>\u00a0of Westminster tax and spending policy, wannabee incumbents of No. 10 and No. 11 should take note.<\/p>\n\n\n\n

First published by the Resolution Foundation<\/a> and reproduced with permission<\/em><\/p>\n\n\n\n

Further reading: Child Poverty in Scotland<\/em><\/a> via National Third Sector GIRFEC Project and Barnardo’<\/em>s<\/p>\n","protected":false},"excerpt":{"rendered":"

‘How the Scottish government plans to fund the \u00a3180 million policy remains to be seen. But after years of cuts to UK social security, it is a pleasant change to see significant new efforts to reduce child poverty’.<\/p>\n","protected":false},"author":272,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[319],"tags":[395,36],"class_list":["post-8682","post","type-post","status-publish","format-standard","hentry","category-economy","tag-child-poverty","tag-scottish-government"],"_links":{"self":[{"href":"https:\/\/sceptical.scot\/staging\/wp-json\/wp\/v2\/posts\/8682","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sceptical.scot\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sceptical.scot\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sceptical.scot\/staging\/wp-json\/wp\/v2\/users\/272"}],"replies":[{"embeddable":true,"href":"https:\/\/sceptical.scot\/staging\/wp-json\/wp\/v2\/comments?post=8682"}],"version-history":[{"count":1,"href":"https:\/\/sceptical.scot\/staging\/wp-json\/wp\/v2\/posts\/8682\/revisions"}],"predecessor-version":[{"id":18756,"href":"https:\/\/sceptical.scot\/staging\/wp-json\/wp\/v2\/posts\/8682\/revisions\/18756"}],"wp:attachment":[{"href":"https:\/\/sceptical.scot\/staging\/wp-json\/wp\/v2\/media?parent=8682"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sceptical.scot\/staging\/wp-json\/wp\/v2\/categories?post=8682"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sceptical.scot\/staging\/wp-json\/wp\/v2\/tags?post=8682"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}