How can it be done

In the past there has been some debate about the Scottish Government’s ability to mitigate the two child limit, so can what I’m suggesting even be done? Can the bedroom tax, benefit cap and two child limit all be abolished for universal credit claimants in Scotland?

This boils down to three questions, can the Scottish Government afford it, do they have the legal powers to make it happen, and could the DWP change Universal Credit this way for claimants in Scotland?

Let’s take those one at a time.

Funding

This is the easy one. The Scottish Government already give councils enough money to mitigate the bedroom tax and the benefit cap in full, all they would have to do is move the money from discretionary housing payments to DWP. They have also committed to mitigating the two child limit in full starting in 2026. So the money to make the additional payments through the universal credit system is already there.

Of course there are other costs, the Scottish Government would presumably have to pay DWP to make the changes and to deliver the Scottish enhanced UC. Now I don’t know how much this would all cost, but the Scottish Government have already set aside money to deliver a new Scottish benefit payment, this money could be repurposed for paying DWP to change UC instead. Similarly the Scottish Government pay for the administration of bedroom tax and benefit cap mitigation already, and are planning to administer a new two child limit benefit. Again this money could be repurposed for UC administration. It’s hard to believe that making the changes through universal credit would be more expensive than the current planned approach, if anything it should surely be cheaper.

Legal issues

The fact that both the UK and Scottish Governments have previously agreed that the bedroom tax can be mitigated at source through universal credit in Scotland is important here. The Social Security Act in Scotland gives ministers powers to create new housing payments and that is how the bedroom tax mitigation would be delivered. 

The social security act also gives Scottish ministers powers to “top up” universal credit. That’s actually the legal power used to deliver the Scottish Child Payment and it is the power the Scottish Government plans to use to deliver the new two child limit. But there’s nothing in the Act to say the power must be used to deliver a separate payment. As with the housing power mentioned above it could be used to deliver extra money through universal credit.

Finally there’s a way in which delivering all of this through universal credit is actually easier from a legal perspective. When the Scottish Government creates a new payment, legal steps need to be taken in both the Scottish and UK parliaments to make sure this payment doesn’t get taxed or inadvertently cause uk benefits payments to be reduced. This wouldn’t be needed if everything was delivered through universal credit itself.

So the legal powers exist, and if anything it’s easier to deliver the mitigation package through universal credit than the current planned approach to create a new Scottish benefit.

Delivering the change through universal credit 

First of all, as mentioned above both the UK and Scottish Governments have agreed in principle that the bedroom tax can be mitigated at source through Universal Credit. That means they both think that it is practically possible to identify Scottish claimants of universal credit, pay them a different amount of housing support to people in the rest of the uk, and put in place a system to bill the Scottish Government for that.

If they can do it for the bedroom tax then I see no reason why they can’t also do it for the benefit cap and the two child limit. We already know that within universal credit as it stands just now in certain circumstances the benefit cap can be switched off (for example when a claimant reaches pension age) and the two child limit can be switched off (for example the infamous “rape clause”) so if these cuts can be turned off in certain circumstances, it ought to be possible to add a new one - being resident at a Scottish address.

Just because it can be done…..

None of this means the uk government would have to deliver the changes to UC even if the Scottish Government asked them to. The Scottish Government can’t compel the UK Government to change UC, but it can ask, and in my opinion it should ask.

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