Indicative Forecasts

From April 2020, devolution of the areas of social security set out in the Social Security (Scotland) Act 2018 is almost complete. While executive competence has been devolved for most payments, several continued to be administered by the Department for Work and Pensions (DWP) under Agency Agreements.  Except for people receiving Severe Disablement Allowance, the Scottish Government plans to transfer everyone receiving a UK Government disability or carers’ payment to a Scottish payment by the end of 2025.

We have assumed a progressive transfer of people receiving a UK Government payment to a Scottish replacement payment.  There is still a high degree of uncertainty with the provisional timelines and most of the policy details for the replacement payments are yet to be confirmed.

In our latest forecast, May 2022, we have estimated spending on Scottish Carer’s Assistance (SCA), Pension Age Disability Payment (PADP), Employment Injuries Assistance (EIA), Pension Age Winter Heating Assistance (PAWHA) and the Scottish Adult DLA. We also include an estimate for spending on services to replace the current Fair Start Scotland employability service.

We assumed that Scottish Carer’s Assistance (SCA) replaces Carer’s Allowance (CA), and our forecast will also cover the Scottish Government Carer’s Allowance Supplement (CAS) payment; Pension Age Disability Payment (PADP) replaces Attendance Allowance (AA); Employee Injuries Assistance (EIA) replaces Industrial Injuries Disablement Scheme (IIDS);  Pension Age Winter Heating Assistance (PAWHA) replaces Winter Fuel Payments (WFP); and Scottish Adult Disability Living Allowance replaces Adult Disability Living Allowance.

The assumptions made on the indicative forecasts are based on discussions with the Scottish Government in which our assumptions on the timings for launching the payments and the transfer of clients, as well as the principles of the policies in development were deemed reasonable, yet to be confirmed. Where appropriate, we have assumed increases in successful new applications aligned with judgements used to estimate spending changes for similar policy changes. We will review the assumptions as more information becomes available and will publish detailed estimates of spending after the policies are announced.

The increase in the number of people receiving PADP has a knock-on effect on the number of people receiving SCA, as there will be a higher number of eligible people caring for a pensioner receiving an award for a disability payment.

Forecast spending for Low Income Winter Heating Assistance
£ million 2023-24 2024-25 2025-26 2026-27 2027-28
Scottish Carer’s Assistance 24 54 75 78
Pension Age Disability Payment 18 39 50 59
Employment Injury Assistance 0 2 3
Employability Services 13 21 25 25 25
Pension Age Winter Heating Assistance 184 189 191 190
Knock-on Effect on SCA 1 2 2 3
Total Additional Spending 13 249 309 344 359