1. Universal Credit ( UC) is a single payment for working age people introduced by the UK Government. UC aims to improve work incentives, simplify the benefit system and reduce fraud and error. UC remains reserved to the UK Government, however, the Scottish Government has some administrative powers to change payment arrangements for UC.
2. The main differences between UC and other current welfare benefits, for example Jobseeker's Allowance, are that:
- UC is available to people who are in work and on a low income, as well as to those who are out of work;
- most people will apply online and manage their claim through an online account;
- people will usually receive just one monthly payment per household, paid into a bank account; and
- support with housing costs (rent) will go directly to the individual in most cases as part of their monthly payment.
The Scottish Flexibilities
3. Sections 29 and 30 of the Scotland Act 2016 allow Scottish Ministers to introduce flexibilities in relation to UC with regard to the person to whom, and the time when, UC is to be paid. These are:
- having the option of being paid UC twice a month rather than monthly;
- having the option of any UC housing element being paid direct to social and private sector landlords;
- the power to vary the amount of housing costs paid to people in receipt of Universal Credit; and
- the power to split payments between members of a household
4. The two priority flexibilities being progressed through the Universal Credit (Claims and Payments) (Scotland) Regulations 2017 are:
- having the option of being paid UC twice a month rather than monthly; and
- having the option of any UC housing element being paid direct to social and private sector landlords.
5. These changes are intended to provide more choice and control over UC payments, as well as safeguarding tenancies and preventing the build-up of rent arrears. Neither option will affect the overall amount of UC that is payable.
6. These changes will not replace the Department for Work and Pensions ( DWP) system for Alternative Payment Arrangements  which will continue to operate for those who fall under the current criteria of requiring this ( e.g. as a result of a vulnerability or rent arrears).
7. The two priority flexibilities will be available for new claimants in full service UC areas. We are working with the DWP to agree when existing UC recipients will also have the option of requesting the Scottish flexibilities and we will communicate this widely to people in receipt of UC and local and national partners before the Scottish flexibilities for new claimants in full service UC areas come into effect.
8. The two other UC flexibilities are being progressed separately. First, the power to vary the amount of housing costs paid to people in receipt of UC and we are working with the DWP to establish a way that we can abolish bedroom tax at source.
9. Second, 88% of respondents to the social security consultation supported splitting payments between members of a household. People emphasised that money can sometimes be used as a tool in domestic abuse settings and that the DWP's approach to UC could result in one person receiving benefits on behalf of the entire household, which could exacerbate existing problems. The Scottish Government is committed to tackling all forms of violence against women, including domestic abuse. That is why we have already begun to take this work forward with womens' groups, disability and carer organisations. Following discussion and agreement with the DWP we will make an announcement on how and when split payments can best be delivered in due course.
10. As UC remains reserved to the UK Government, the Scottish flexibilities will be delivered by the DWP and arrangements for delivery will be set out formally in a Service Level Agreement agreed by both Governments. The Scottish flexibilities will, however, form part of the Scottish Government's wider work programme on social security to ensure that the appropriate links are made to the new Scottish Social Security Agency and the 11 benefits that are being devolved.
11. We received 100 responses to the consultation on the draft Universal Credit (Claims and Payments) (Scotland) Regulations 2017. An independent analysis was carried out by Craigforth and the full report is available at: http://www.gov.scot/Publications/2017/06/7377
12. The consultation asked if the draft regulations met the policy intent of offering a choice to applicants on having their UC payments made twice monthly and also the choice of managed payments of rent direct to landlords.
13. On the frequency of payment question, 88 out of 100 respondents thought the draft regulations met the policy intent. On the question of managed payments of rent to landlords, 87 out of 100 respondents thought the policy intent was met.
14. Respondents were also able to provide further remarks in addition to their yes/no answers. These resulted in many comments which were out with the scope of this consultation and beyond the powers available to the Scottish Government through the Scotland Act 2016. Nevertheless, they are very important to the successful implementation of the Scottish flexibilities and that is why our response also covers them.
Email: Martyn Lindsay, firstname.lastname@example.org
Phone: 0300 244 4000 – Central Enquiry Unit
The Scottish Government
St Andrew's House