How the Scottish child payment has made a real difference – and not discouraged parents from working

In Scotland, though, a small but vital bit of extra support is available for children thanks to the Scottish child payment (SCP), an extra £27 a week paid by the Scottish Government to every child under 16 in a low-income family.

Our new research examines the difference this benefit is making by directly comparing families north and south of the Border. We’ve found a significant, tangible impact on Scottish families’ ability to afford the essentials. Over 70,000 Scottish children who would otherwise live in food insecurity or material deprivation do not – because of the SCP.

READ MORE: Why Labour's scrapping of abhorrent two-child benefits cap means so much

SNP’s top priority

Yet despite the additional support, many families still find it impossible to make ends meet. The number of children in food insecurity has fallen since the SCP’s introduction but is still around one-in-eight.

Material deprivation has risen less in Scotland than in England, where families don’t receive the extra support – but it has risen nonetheless. So while the policy appears on the right track, there remains work to do.

This is an important and timely message. In January, the Scottish Government will publish its new Budget, with an eye on its top priority of eradicating child poverty. Westminster’s recent decision to scrap the two-child limit means there is an extra £155 million to spend that had been set aside to mitigate that policy.

Happily for Scottish children, the First Minister has promised the money is still earmarked for them. We can see no more effective way to spend it than investing further in the SCP, where it could fund an increase to £35 a week.

Parents not discouraged from working

What though of the risk that a higher SCP might discourage increases in parental employment? Because the SCP is linked to Universal Credit entitlement, a so-called ‘cliff-edge’ is created at a certain level of income, where working one extra hour would mean the total withdrawal of SCP (£27 for one child, £54 for two children etc).

Policymakers have expressed concerns that this could discourage families from working extra hours if it triggered the loss of SCP and then left them worse off.

Our research finds no evidence that parents have responded in this way. This is no big surprise. When we dig into the numbers, we find very few families sitting at incomes which place them close to the cliff-edge.

Most of those potentially affected have one-and-a-half earners in their family already and, even among these ‘second earner’ families, we have seen no changes in labour market behaviour in Scotland compared to England that would suggest the cliff-edge is a serious problem. Our conclusion is that the concern is significantly overplayed.

The SCP is a real success story for Scotland: making a difference where it matters, and without distorting behaviour. It’s proved a powerful tool for Scotland and with more investment can do more still. Let’s hope that the Scottish Government seize this potential.

Kitty Stewart, London School of Economics; Emma Tominey, University of Manchester, and Ruth Patrick, University of Glasgow.