Welfare Reform is a very hot topic at the moment! So what is it and how does it affect people in Scotland? Changes to our benefit system in Scotland and within the UK are underway. The Welfare Reform Act (2012) was brought in to simplify the current benefit system and remains a reserved matter for Westminster; however the landmark social security system being created allows different decisions to be made in Scotland and this devolution is further enhanced by the Social Security (Scotland) Bill 2017. The introduction of Universal Credit (UC) affects 6 Income related benefits. These are: Job Seekers Allowance/Employment Support Allowance /Income Support Child Tax Credits/Working Tax Credits and Housing Benefits. Instead of receiving individual payments, one payment for all income related benefits will be received.
According to the EHRC ethnic minorities in Scotland have some of the highest levels of poverty and our work at CEMVO Scotland clearly suggests that EM communities do not readily access financial services. What is unclear is how these changes will impact on EM communities, if additional barriers will result and if enough focused work is being done with EM communities to raise awareness about these changes.
For instance, Personal Independence Payments (PIP) will replace Disability Living Allowance. The current PIP application process is not fit for purpose! Some reports highlight the confusing forms that mainly focus on physical impairments, with limited questions focusing on cognitive functions; making the relevance to mental health unclear. Add cultural or language barriers into the mix and this puts EM mental health sufferers at a huge disadvantage, adding to the poverty cycle.
Universal Credit being paid to one person within the household on a monthly basis could result in money not actually getting to those who need it the most in the household. Furthermore, the assumption that people will easily adapt to a monthly budget, could lead to more people living in poverty, due to the lack of good money management skills.
The saving grace here is that the Scottish Government will have some flexibility over certain aspects of universal credit i.e. frequency of payments from monthly to fortnightly, splitting payments within the household and paying the housing benefit directly to landlords. However the debate surrounding the most vulnerable groups in Scotland having an increased risk to debt, facing homelessness, and relying on food banks still continues.
Recent chatter suggests that the Scottish Government are aware that UC issues could add to the poverty crisis, therefore have requested a halt to the accelerated roll out of Universal Credit in Scotland. Which is a small step in the right direction, but we would argue that this needs to work in tandem with more proactive work around awareness-raising and more preventative work around budgeting and financial capability.
To join the debate or for more information follow the links: