New Scottish Welfare powers have been outlined by the Smith Commission, which will pave the way for the changes to be turned into law.
A significant amount of responsibility for the design and implementation of the welfare system in Scotland will be devolved to the Scottish Parliament.
However, State Pension and the main principles of Universal Credit will remain in the hands of Westminster.
The new powers are proposed as follows:
Supporting people back into work
The new powers outlined in the draft clauses published on 22 January 2015 mean that in future, the Scottish Government will be able to set up its own employment programmes to help the long-term unemployed and disabled people into work.
A significant amount of Department for Work and Pensions support to job seekers delivered by centrally-contracted providers – such as the Work Programme – is being devolved.
Help for long-term unemployed and disabled people currently makes up 95% of DWP’s budget for centrally contracted employment support delivered through providers.
Discretionary welfare payments
The Scottish Parliament will have the power to legislate for discretionary payments to people in any area of welfare.
This means Scottish Government Ministers will be able to set up a system to identify where there is a risk to the well-being of an individual and make a payment to that person to address this short-term need.
Benefits for disabled people and carers
Control over benefits affecting some of the most vulnerable members of society will be devolved to the Scottish Parliament.
This includes things like Disability Living Allowance, Carer’s Allowance, Attendance Allowance, Personal Independence Payment and industrial injuries benefits.
This means the Scottish Parliament will have wide-ranging powers to make provision for Scottish versions of these benefits – with the ability to change the rules, or even replace these benefits with new ones or other payments and services.
Regulated Social Fund
The Scottish Parliament will have the power to make its own provision for the subject matter of the Regulated Social Fund – this means Winter Fuel Payments, Cold Weather Payments, Sure Start Maternity Grants and Funeral Payments. It will also be able to create new benefits in this area if it wishes.
Universal Credit remains reserved, but the Scottish Government will have new powers to determine how claimants are paid and how much some claimants get for housing support.
Scottish Government Ministers will be able to decide how often to pay Universal Credit to claimants, and will be able decide when to pay housing costs directly to landlords.
Scottish Government Ministers will also be able to vary the housing costs covered by Universal Credit for people in rented accommodation.
Discretionary Housing Payments
Discretionary Housing Payments will be devolved in full. This will give the Scottish Parliament the power to support Housing Benefit and certain Universal Credit claimants who need help with their housing costs.
Scotland’s First Minister and leader of the SNP, Nicola Sturgeon, welcomed the proposals but argued they had been “watered down” and do not go far enough.
“Throughout this process, I have been clear that, despite it falling short of the real home rule powers we need to create jobs and tackle inequality, the Scottish Government would be a constructive participant, working with the UK Government to bring forward what Lord Smith recommended.
“The legislation published today does not represent the views of the Scottish Government, but it does represent some progress. However, too much of what the Prime Minister has set out imposes restrictions on the recommended devolved powers and would hand a veto to UK ministers in key areas.
“For example, the proposals on welfare do not allow us to vary Universal Credit without the permission of the UK Government. That means – under the current proposals – we will not have the independence to take action to abolish the bedroom tax.
“At the same time, the power argued for by stakeholders to create new benefit entitlements in any devolved area has simply not been delivered, while the command paper makes clear that, pending devolution of disability support, the roll-out of personal independence payments and the cut to spending on disability benefits will continue.
“This cannot, under any interpretation, represent the meaningful progress on the devolution of the powers we need to design a social security system that meets Scotland’s needs.
“The support for unemployed people also falls short of what Lord Smith recommended, with the provisions set out today narrowly focused on existing schemes.
“And the paper confirms that the Scottish Government will still have to work within the framework of austerity being imposed by the UK Government. It also suggests that Scotland’s capital grant could be replaced by borrowing powers and not augmented by them as was clearly the intention of the Smith proposals.
“In these crucial areas the clauses set out today appear to be a significant watering down of what was promised by the Smith Commission and need an urgent rethink by the UK Government.”
Nicola Sturgeon concluded:
“We remain committed to this process, despite the difficulties we have experienced in getting information in a timely fashion and we will continue to work with the UK Government and other stakeholders to ensure that the changes are made ahead of the Bill being taken through Westminster.
“Ultimately, however, the decision on whether the Smith proposals go far enough in delivering the powers we need to create prosperity, tackle inequality and protect our public services will be for the people of Scotland to take.”