Benefit claimants in Scotland are being paid up to £1,400 per month more than those in England thanks to the SNP’s “runaway” welfare system.
Figures obtained by The Telegraph show there are more than 2,000 low-income families receiving the Scottish Child Payment, the flagship SNP welfare benefit created by Nicola Sturgeon, for five children or more.
At the end of March 2024 seven families were claiming the benefit, worth £1,388.40 per child annually, for 10 or more children, which at current rates would boost their incomes by almost £14,000 per year.
One household was handed an extraordinary £16,763 in only 12 months, over and above any benefits they claimed from the UK Government such as Universal Credit, in Scottish Child Payment and other devolved family payouts.
The SNP has repeatedly argued that the UK’s two-child benefit cap is inhumane and has refused to place any limit on the numbers eligible for benefits.
But a senior Tory MSP accused SNP ministers of creating the “ultimate poverty trap” by making their system so generous that there is no incentive for claimants to increase their earnings and risk losing the lucrative handouts.
Low-income ‘cliff edge’
Eligibility for the Scottish payouts is tied to receipt of UK benefits such as Universal Credit or Child Tax Credit, meaning low-income Scots with children face a “cliff edge” that could cost them thousands if they increase their earnings to a level that would see them miss out.
Stephen Kerr, the Central Scotland MSP, said “hard-working Scots” were being forced to fund the system with higher taxes, with those on salaries of £50,000 paying £1,542 more in income tax than if they lived elsewhere in the UK.
“Scots will be incredulous to learn that one family has pocketed over £16,000 in a single year, without even counting UK-wide benefits,” Mr Kerr said.
“The SNP has created a benefit system that costs the taxpayer an absolute fortune and leaves claimants on the scrapheap. It is the ultimate poverty trap.
“It actively discourages people from taking jobs or extending their working hours. Hard-working Scots are being forced to pay higher taxes than the rest of the UK to fund this runaway welfare system.
“It’s time to rein in this reckless SNP spending and stand up for honest, hard-working Scottish families.”
There were 1,550 applicants claiming the child payment for five children, with a further 538 receiving it for between six and nine on March 31, according to Social Security Scotland.
At current rates, the bill to taxpayers for those claiming the Scottish Child Payment for five or more children would be £15.6 million per year.
Unlike the Scottish payouts, UK benefits such as Universal Credit or Child Tax Credit are designed to encourage work by gradually tapering off as earnings increase.
Ballooning welfare
Social security spending by Holyrood is expected to rise from £5.3 billion in 2023-24 to £8 billion annually by 2028, with Scottish ministers having to find £1.5 billion extra every year beyond UK government funding.
Ballooning devolved welfare spending has been cited by independent forecasters as a factor behind a budget crisis at Holyrood, which has left ministers facing a near £1 billion black hole this year.
Mr Kerr added: “There is little that is more corrosive on people, their mental and physical wellbeing, than worklessness. We need to help people into work, not leave them languishing dependent on benefits.”
A Scottish government report, released in July, admitted that claimants would face an effective tax rate that would “exceed 100 per cent” if they earned just enough that they no longer qualified for the child payment.
The 1,550 families claiming for five children would miss out on almost £7,000 per year in Scottish Child Payment if they lost eligibility.
Other benefits for low-income families created by the SNP Government include up to £754.65 during pregnancy, two £314.45 one-off payments for those with pre-school children, and up to £10.60 per week for food.
The highest amount paid to a single family in Scotland’s “five family payments” was £16,763, or £1,397 per month, over 2023-24.
In April, the benefits rose by 6.7 per cent, meaning in the current financial year the equivalent payment would have been worth £17,886.
The figure is roughly equivalent to what a minimum wage employee would make a year for working 30 hours a week.
Scottish government ministers have claimed that the child payment could keep 60,000 children out of relative poverty this year.
However, experts have pointed to a lack of evidence that SNP policies to tackle poverty or health inequalities were working.
A Scottish government spokesman said: “Social security is an essential collective investment in the wellbeing of our country, and a basic human right that offers vital support which any one of us could need at any time in our lives.
“We will continue to invest in it and will not have a cap on the number of children that a family can receive payments for.
“Our recently published analysis of how Scottish Child Payment interacts with the labour market concludes that it is not negatively affecting work incentives at scale in the economy.”
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