How could the benefit changes impact Scotland?

The Chancellor of the Exchequer the Rt Hon Rachel Reeves MP meets with the CEO of Goldman Sachs, David Solomon

The UK Government’s changes to disability benefits have been criticised by campaigners and politicians in Scotland.

New rules for assessing who can receive the personal independence payment (PIP) were announced by chancellor Rachel Reeves in March, alongside changes to universal credit.

Concerns have been raised about how these policies will impact people in Scotland, which has some control over its social security system.

Ferret Fact Service explains.

Ferret Fact Service | Scotland's impartial fact check project

What changes have been announced?

More than 3.5 million people are paid the personal independence payment in England, Wales and Northern Ireland. The benefit is for those who have a long-term physical or mental health condition.

It is made up of two parts, one for daily living and one for mobility. Claimants are eligible for one or both of the elements and payments are adjusted accordingly.

The UK Government plans to tighten up the eligibility criteria for the daily living part of PIP, and applicants will need to score higher on their assessment than previously. There are also plans for more frequent assessments for many people claiming PIP.

The Office for Budget Responsibility has estimated this will result in about 800,000 people having their benefits impacted, and the changes will come into force in April 2026.

People who receive universal credit could also face changes to their payments. About 7.5 million people across the UK get monthly payments, while some in Scotland get their payments twice a month.

Some people who receive universal credit are not obliged to try and find work due to long-term health concerns, and many people receive a top-up to these benefits to account for this.

The new proposals will mean that incapacity benefit will no longer be available to those under 22, while those claiming the benefit for the first time will receive a smaller payment. The weekly amount will be reduced from £97 to £50, at which level it will be frozen until the end of 2029-30.

People already claiming the health-related top-up will have their payment frozen at the higher rate.

How much control does the Scottish Parliament have over disability benefits?

Some benefits are devolved to Scotland, which means a few of the payments received by Scots are the responsibility of Scottish ministers, who make decisions on changes.

Eleven benefits were devolved after the 2016 Scotland Act came into force. These included the disability living allowance, PIP, attendance allowance and severe disablement allowance.

The UK Government retained responsibility for major benefits including universal credit, child benefit, the state pension and maternity allowance.

How could these changes affect Scottish benefits?

In Scotland, PIP has been replaced by the adult disability payment (ADP), and the changes to PIP announced by the chancellor will not apply in Scotland. Currently there are 433,050 people receiving the adult disability benefit.

While there are a small number of people in Scotland still receiving PIP (because ADP is not fully rolled out), it is expected everyone will be transferred over to adult disability payments  by the time the main changes proposed by the UK Government come into force.

The Scottish Government has ruled out making similar changes to those made by the UK Government. The cabinet secretary for social justice, Shirley-Anne Somerville, told a Scottish Parliament committee on 6 March that ministers “do not intend to follow Westminster’s approach, because that would be exceptionally detrimental to people who receive those payments and are entitled to them.”

Universal credit changes will impact Scotland, as this benefit remains reserved to Westminster.

What about Scotland’s budget?

While Scottish ministers have no plans to replicate the UK Government’s reforms, there may be a knock-on effect for the Scottish Government.

The Scottish Government gets most of its funding each year through a block grant, transferred from the UK Government, which is made up of a proportional allocation of money accrued from taxes from all the UK’s nations, including Scotland. The Scottish Government decides how the block grant is spent.

Changes to the budget are made annually based on spending by the UK Government that year. Scotland is given a proportional amount of that change in spending, depending on whether the money has been spent in an area where powers are reserved by Westminster or devolved to Scotland. This calculation is known as the Barnett formula.

If there is a spending increase on UK Government NHS spending, for example, there will be a knock-on increase in the block grant for Scotland.

The aim of the UK Government’s plans on disability benefits is to save money, so there may be a reduction in spending, with a knock-on impact on the Scottish block grant.

This would mean Scottish ministers would either have to similarly reduce spending on their benefits system to cover the costs, try and find the money from elsewhere in its annual budget, or raise money for it through taxation, for example.

Analysis by economic researchers the Fraser of Allander Institute found that PIP reforms will see social security spending reductions to the block grant. FAI estimates this will increase from £177m in 2027-28 to £455m. This could see the Scottish budget about £900m worse off by 2029-30, compared to previous projections.

Ferret Fact Service (FFS) is a non-partisan fact checker, and signatory to the International Fact-Checking Network fact-checkers’ code of principles.

All the sources used in our checks are publicly available and the FFS fact-checking methodology can be viewed here.

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Main image: Kirsty O’Connor/No 10 Downing Street, CC BY-NC-ND

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