Mental health issues linked to costs crisis see more claim benefits, MSPs told

Mental health conditions stemming from the cost-of-living crisis may be causing an increase in people going on to disability benefits, MSPs have heard.

The Scottish Fiscal Commission (SFC) also suggested rising costs are leading to people applying for different benefits than they would otherwise.

While these trends are being seen across the UK, the Scottish Government’s approach to disability benefits means the rate of increase has been higher north of the border.

SFC chairman Professor Graeme Roy and other officials gave evidence to Holyrood’s Social Justice Committee on Thursday.

They referred to their recent forecast report produced around the Scottish Budget.

It examined how the Government’s social security spending is higher than the amount it receives from Westminster via block grant adjustments.

In the 2024/25 financial year, this spending will be around £1.1 billion higher, with this figure forecast to rise to £1.5 billion in 2028/29.

Prof Roy explained to the committee the gap is the result of Scottish ministers’ choices to bring in new benefits like the Scottish child payment and the different approach to the adult disability payment – which replaced the UK’s personal independence payment (PIP) system.

The SFC report said Scottish ministers had chosen to implement a more “person-centred social security system”.

The SNP’s Marie McNair asked Prof Roy why the cost-of-living crisis appears to be leading to a short-term increase in disability benefit applications across the UK.

Prof Roy said: “It could be because the cost-of-living crisis is increasing concerns around disability and mental health, so it’s pushing people into difficult positions so then they’re more likely to claim these benefits.

“It also could be if people are facing a difficult choice in terms of their household incomes, are they more likely to claim a benefit that is potentially higher than they might otherwise claim?”

He said this phenomenon could be short term, based on the economic cycle, but that often people do not exit the benefit system quickly once they enter it.

Prof Roy said there is a “more supportive environment” around the adult disability payment compared to PIP, meaning fewer people are being discouraged from applying.