Scottish Government estimates that 60,000 claimants in Scotland will be pushed into poverty if emergency coronavirus-related benefit increases are withdrawn in April 2021

Social Security Secretary urges UK Government to use next week’s Spending Review to confirm continuation of £20 benefit uplift and relaxation of minimum income floor rules into new financial year

A new report from the Scottish Government estimates that 60,000 claimants in Scotland will be pushed into poverty if emergency coronavirus-related benefit increases are withdrawn in April 2021.

In Impact of withdrawing emergency benefit measures, the Scottish Government uses the 'UKMOD' microsimulation model to estimate that Scottish households will lose £476 million if the UK Government takes away the £20-a-week increase in universal credit and working tax credit rates, and the relaxation of the minimum income floor rules for self-employed claimants, that were introduced in response to the COVID-19.

In addition, the report highlights that 20,000 children will be among the 60,000 people pushed into poverty as a result of the cuts, a sign that the impacts of the cuts will not be borne equally across society -

• people in the poorest 10 per cent of households (decile 1) affected by the cuts would lose 15 per cent of their average income, more than double the losses for people in all other deciles;
• families with nobody in employment would be hardest hit, followed by families which derive most of the earnings from self-employment - reflecting the overall wage distribution, as families with no earnings tend to have the lowest incomes; and
• lone parents and single people would experience the largest losses on average across the population (averaging more than 3 per cent of annual household income).

Commenting on the report, Social Security Secretary Shirley-Anne Somerville said today -

‘We are very concerned about the economic impact of the pandemic on people, particularly those on low incomes. This report highlights that if these cuts go ahead, hundreds of thousands of households in Scotland will see their incomes drop by more than £1,000 per year. This could push even more people into poverty.

Last year the Scottish Government invested nearly £2 billion to support low income households and to tackle poverty. We have also introduced the new Scottish Child Payment to tackle child poverty head on.

The UK Government must match our ambition and support people in need. They can start by using next week’s spending review to confirm that they will keep the £20 uplift to universal credit and working tax credits and give people the certainty they need, not wait until April 2021 when people will face a cliff edge.’

For more information, see Impact of withdrawing emergency benefits from gov.scot