WELFARE

Warnings have been issued that the real-terms cut in benefit payments will push more Scots into poverty at a time of rising joblessness.

Around 140,000 Scots will see their unemployment benefits rise by just £1 a week or less as Chancellor George Osborne seeks to hold the majority of welfare benefits way below the rate of inflation.

Those in receipt of Jobseeker's Allowance will see their payments – a maximum of £115 a week – rise by 1%, with claimants of Income Support – those on a low income who work 16 hours a week or less – to receive the same increase from next April.

The same rise in Child Benefit payments, which are currently frozen, will apply for two years from spring 2014.

The cap on benefit payments, due to save £3.7 billion from the welfare bill, comes as inflation runs at 2.7%, with food prices and energy costs spiralling beyond the average increase in the cost of goods and services.

Research from supermarkets recently found the cost of a loaf of bread had risen by 6% in the three months to September.

Julia Unwin, chief executive of the Joseph Rowntree Foundation, forecast a "decade of destitution" and said the real-terms cut in benefit payments would increase poverty.

She said: "The uprating of benefits by 1% will increase poverty. We should be clear about this. The distinction between 'strivers' and 'shirkers' is totally false: we know from years of research that people move in and out of work. Last week we published a report showing there are some 6.1 million people in poverty who are in work.

"So the welfare cut (and in real terms, it is a cut) does not just affect some mythical group of immoral workshy scroungers. It affects people who are working – who are, in the political lingo, doing the right thing and playing by the rules. Poorer people are facing destitution, perhaps a decade of destitution, felt by future generations."

Latest figures from the Office for National Statistics (ONS) showed unemployment in Scotland rose by 4000 between July and September to 218,000.

Dr Mary Taylor, chief executive of the Scottish Federation of Housing Associations, said rising debt was now an issue in light of the 1% rise.

She said: "Restricting the uprating of many working-age benefits to lower than the rate of inflation to just 1% is the latest of a series of welfare cuts which will be a further blow that hits the poorest and most vulnerable in our communities the hardest. The true extent of the impact will not be felt for some time, but the risk of rising debt and arrears is all too real.

"Although it appears that housing benefit for tenants of social housing has not been affected by the limit on increases of 1%, people on low incomes including housing association tenants will still be hit hard by the budget announcement, and the forthcoming introduction of Universal Credit will merge all benefits together."

Ms Taylor added: "A reduction in overall levels of benefit for working households at a time when prices are rising and jobs are scarce, will hit people and communities that are already struggling to make ends meet."

The cap will not apply to benefits for the disabled and carers, which will increase in line with inflation.

Mr Osborne said the 1% increase was "confronting the country's problems, not ducking them".

He added: "Benefits are being capped for the first time so the average family out of work will not get more than the average family in work," he said.

Children in Scotland, the national agency for those working with some of the most vulnerable young people north of the Border, said it welcomed the rises for the disabled and their carers but added it was concerned for others facing a below-inflation settlement on their benefit payments.

Jackie Brock, chief executive of Children in Scotland, said: "With this in mind, we appeal to Scotland's MPs and the Scottish Parliament to press the UK Government to do more to protect children, young people and families."