Corporate report

Carer’s Allowance Reassessment Exercise for People Resident in Scotland: Agency Agreement

Updated 12 August 2026

Role	Name	Position
Author	[Redacted]	[Redacted]
Owner	Ally MacPhail	Deputy Director, Organisational Strategy and Performance, Social Security Scotland
Owner	Neil Couling	DWP Director General for Fraud, Disability and Health

Version History

Version	Date Issued	Summary of Changes
1.0	19/06/2026	Signed version

1. The Agreement

1. This Agency Agreement (hereafter referred to as ‘this Agreement’) is entered into between the Secretary of State for Work and Pensions of Caxton House, Tothill Street, London SW1H 9NA (DWP) and the Scottish Ministers of St Andrews House, Regent Road, Edinburgh EH1 3DG

2. References to the Scottish Government, the Scottish Ministers or Social Security Scotland will, as appropriate, be read as also including reference to each of the other entities.

3. References to Secretary of State for Work and Pensions shall be read as including reference to the Department for Work and Pensions (DWP), as appropriate, and vice versa.

2. Purpose

2.1 Pursuant to section 93 of the Scotland Act 1998, the Secretary of State for Work and Pensions may perform on behalf of the Scottish Ministers functions specified under the Scotland Act 1998 (Agency Arrangements) (Specification) Order 2018 – Statutory Instrument (S.I.) 2018/626. DWP administered Carer’s Allowance awards for Scottish clients on behalf of Scottish Ministers under such an Agency Agreement when executive competence transferred to Scottish Ministers from 3 September 2018 and the arrangement ended on 31 March 2026. DWP commissioned an Independent Review of Carer’s Allowance overpayments which was published alongside DWP’s response in November 2025^{[footnote 1]}. The earnings limit in Carer’s Allowance is a weekly one, but in some cases, earnings can be averaged over a number of weeks.

2.2 The Independent Review of Carer’s Allowance overpayments^{[footnote 2]} found issues with Departmental guidance. DWP accept that, between 2015 and November 2025, the guidance on whether and how to average earnings did not accurately reflect the statutory position. DWP will, therefore, be reviewing Carer’s Allowance decisions that resulted in an earnings-related overpayment in England, Wales and Scotland between 2015 and November 2025 where fluctuating earnings may have been treated incorrectly. Where such a decision is revised, DWP will reduce the outstanding overpayment accordingly, and pay back any debts it should not have pursued in the first place. DWP will not seek recovery if the reassessment determines that a larger overpayment should have been calculated.

2.3 The Secretary of State for Work and Pensions advised Scottish Ministers of the outcome of the independent review and offered to include decisions made on Scottish Carer’s Allowance awards under Agency Agreement between 2018 and 2025 in the reassessment exercise. Scottish Ministers agreed that DWP can perform those functions, in accordance with this Agreement, insofar as they relate to the delivery of the Carer’s Allowance earnings related overpayments reassessment exercise for people resident in Scotland.

3. Duration

3.1 This Agreement sets out the agency arrangements for the purpose described in paragraph 2.1, 2.2 & 2.3 above. It shall commence on 1st April 2026 (“the Commencement Date”) and DWP expects to conclude this review of Carer’s Allowance earnings cases within a 3-year period (“the Term”).

3.2 This Agreement may be varied by mutual written agreement of both parties at any time during the Term. Both parties will review this Agreement twelve (12) months after the Commencement Date and set out any changes in a revised Agreement.

3.3 In the event of DWP or Scottish Ministers choosing to terminate this Agreement, DWP and Scottish Ministers shall prepare and agree an appropriate exit plan for the termination of the Services which will seek to ensure no impact on the Services. No less than (12) months’ notice will be required to terminate the Agreement.

4. Derivation

4.1 This Agreement forms an annex to the ‘Memorandum of Understanding between the Scottish Ministers (SM) and Secretary of State for Work and Pensions (SSWP) on joint working arrangements covering the implementation of devolved provisions in the Scotland Act 2016 relating to Social Security and Employment Support Services in Scotland’, and will be read in conjunction with the following documents and any subsequent arrangements which are agreed and support this Agreement, insofar as they are not replaced or terminated in the future.

Document	Date
Concordat between the Department for Work and Pensions and Scottish Government	March 2020
Memorandum of Understanding and Supplementary Agreements on Devolution between the United Kingdom Government, the Scottish Ministers, the Welsh Ministers, and the Northern Ireland Executive Committee (MoU on Devolution)	October 2013
Memorandum of Understanding between the Scottish Ministers (SM) and Secretary of State for Work and Pensions (SSWP) on joint working arrangements covering the implementation of devolved provisions in the Scotland Act 2016 relating to Social Security and Employment Support Services in Scotland (SM/SSWP Single MoU)	January 2023
Memorandum of Understanding Between the Secretary of State for Work and Pensions and The Scottish Ministers acting through the Scottish Government and on behalf of Social Security Scotland in relation to benefit accounting and reconciliation services provided to the Scottish Ministers	March 2020
The Agreement between the Scottish Government and the United Kingdom Government on the Scottish Government’s Fiscal Framework	August 2023
Scottish Devolution: A Framework for Audit and Accountability	March 2019
DWP and Scottish Government Joint Communications Framework	December 2023

5. Delivery of Carer’s Allowance reassessment exercise

5.1 DWP will, on behalf of and as agreed with the Scottish Ministers, deliver an operational service for reassessing and revising if appropriate Carer’s Allowance for people resident in Scotland decisions that resulted in an earnings-related overpayment between 2018 and November 2025 where the treatment of fluctuating earnings may have given rise to an incorrect overpayment.

5.2 Information on how DWP decides Carer’s Allowance claims and awards can be found in the DWP Decision Makers Guide. This is an approved guide to help Carer’s Allowance reassessment exercise Case Managers make decisions. It is a plain English representation of social security law and case law. It can be found on GOV.UK at: Decision makers’ guide: Vol 10, Chapter 60: Carers Allowance and Decision makers’ guide: Vol 3, Chapter 15: Earnings for non-income-related benefits.

6. Revisions and changes to Carer’s Allowance re-assessment exercise

6.1 DWP agrees to inform the Scottish Ministers, as soon as practically possible, of any changes to the Carer’s Allowance reassessment exercise, including legislation, or supporting legislation that may impact on or require changes to the functions carried out on behalf of the Scottish Ministers. Both parties would need to agree whether a revision to this Agreement is required.

6.2 Both parties shall act transparently and will work in a practical way to resolve any issues that may arise, in the spirit of co-operation, trust, respect and confidentiality. This Agreement will be reviewed as required, through the Joint Ministerial Working Group on Welfare.

7. Disputes

7.1 In the first instance DWP and Scottish Ministers will notify each other of any issues, concerns or complaints regarding any matter covered by this agreement. Contact will be made by the owners of this Agreement.

	Name
Scottish Government	Ally MacPhail, Deputy Director, Organisational Strategy and Performance, Social Security Scotland; [Redacted]
DWP	Neil Couling, Director General for Fraud, Disability and Health; [Redacted]

7.2 The process for dispute resolution is outlined in Section 6 (Escalation) of the SM/SSWP Single MoU, as referenced in Section 4 (Derivation) of this Agreement.

8. Litigation

8.1 The Scottish Ministers will notify DWP and the Office of the Advocate General (OAG), by email, within three (3) working days of the receipt of any pre-action correspondence, initial writ, petition or claim in the Sheriff Court or any petition for judicial review in the Court of Session in relation to Carer’s Allowance customers resident in Scotland within scope of the reassessment exercise or any legal challenge in relation to data protection, which is raised by a person resident in Scotland and/or relates to a decision or action of DWP made before the Commencement Date or made during the Term of this Agreement. DWP will conduct any such litigation on the basis of business as usual arrangements.

8.2 DWP agrees to inform the Scottish Ministers, as soon as practically possible, on the progress of any judicial review or challenge in relation to data protection, or any decision in such litigation proceedings, which has an impact on the delivery of the Carer’s Allowance reassessment exercise to customers resident in Scotland which is being administered by DWP. DWP will conduct any such litigation on the basis of business as usual arrangements.

8.3 DWP and the Scottish Ministers agree in relation to any challenges brought in a tribunal by a customer resident in Scotland, where the claim relates to decisions or actions of DWP in relation to Carer’s Allowance customers resident in Scotland in scope of the reassessment exercise, either for the period before 3 September 2018 when DWP was responsible for the claim, or thereafter that date when DWP was acting on behalf of Scottish Ministers in administering Carer’s Allowance in Scotland for the Scottish Government under the Carer’s Allowance Agency Agreement:

• DWP will conduct any such litigation at the First-tier and Upper Tribunal in accordance with their business as usual arrangements

• DWP will liaise, where necessary, with OAG to conduct any litigation conducted in the Upper Tribunal, and

• where appropriate OAG will instruct Standing Junior Counsel from the Advocate General’s panel or Senior Counsel authorised by the Advocate General to appear in accordance with business as usual processes

8.4 The decisions or actions of DWP mentioned at paragraph 8.3 are ones which are made by DWP before the Commencement Date or during the Term.

8.5 Where a judicial review claim or a challenge brought in the Upper Tribunal relating to a matter covered by paragraphs 8.1, 8.2 or 8.3 above raises a devolution issue as defined in Schedule 6 of the Scotland Act 1998, DWP will, as soon as practically possible, notify the Scottish Ministers and OAG of the devolution issue. DWP and/or OAG will normally retain conduct of the litigation in accordance with the arrangements under paragraphs 8.1, 8.2 and 8.3 above. The Advocate General has a statutory role in relation to devolution issues as does the Lord Advocate. Accordingly, OAG will discuss litigation strategy in such cases with DWP and the Scottish Government Legal Directorate on a case by case basis. OAG and DWP may agree that the Scottish Government Legal Directorate leads on the conduct of the litigation in cases where a Scottish court or tribunal has directed that they should do so, or where the Advocate General (in consultation with DWP) and the Scottish Ministers, consider that is appropriate. Nothing in this agreement affects either the Advocate General’s or the Lord Advocate’s statutory role in relation to devolution issues.

8.6 The Scottish Ministers agree to notify DWP, by email, within three (3) working days of any challenge which is brought in a tribunal by a customer resident in Scotland which relates to decisions or actions of DWP in relation to the Carer’s Allowance reassessment exercise for customers resident in Scotland which were made before the Commencement Date.

8.7 The Scottish Ministers agree that, within three (3) working days of initial receipt of any correspondence, initial writ, petition or claim referred to in paragraph 8.1 above, they will issue an acknowledgement to the pursuer or customer noting that their correspondence, initial writ, petition or claim has been forwarded to DWP and OAG. DWP will respond to any such pre-action correspondence, initial writ, petition or claim in accordance with business as usual arrangements.

8.8 Where, as a result of a decision of a Tribunal or higher courts, or because DWP itself becomes aware of an administrative error which occurred prior to the Commencement Date, a Legal Entitlement and Administrative Practices (LEAP) exercise is necessary, or DWP suspects a LEAP exercise may be necessary then, where the LEAP exercise relates to the Carer’s Allowance Reassessment exercise and impacts customers resident in Scotland, DWP agrees to inform the Scottish Ministers as soon as is reasonably practicable of the need, or potential need, to conduct a LEAP exercise, the reason the exercise is required, or potentially required, the scale and scope of the exercise (if known), and how it will conduct any such LEAP exercise (if known). DWP will plan, organise and administer any such LEAP exercise in accordance with business as usual arrangements.

8.9 Scottish Ministers will provide any documents or information as DWP may reasonably request to assist with the litigation or LEAP exercise. DWP will inform Scottish Ministers as soon as reasonably practicable of the outcome of the litigation or LEAP exercise and provide any documents or information used to support that outcome that may reasonably be required by Scottish Ministers.

8.10 DWP and the Scottish Ministers agree that any litigation which has not concluded at the end of the Term of this Agreement will continue to be administered by DWP, conducted in accordance with the above paragraphs, beyond the end of the Term until the conclusion of that litigation.

9. Business Continuity

9.1 If the DWP business continuity plans are invoked which affect delivery of Carer’s Allowance reassessment exercise to customers resident in Scotland DWP will advise the Scottish Government Single Point of Contact (SPoC) of the issue, impact and resulting action as soon as reasonably practicable.

Title	Name
Scottish Government SPoC	[Redacted]

10. Management Information

10.1 DWP and the Scottish Ministers have agreed Management Information (MI) will be supplied to Social Security Scotland to enable them to discharge accountabilities on the following principles relating to the delivery of Carer’s Allowance reassessment exercise to customers resident in Scotland:

• DWP will not create new MI reports that detail performance specifically for customers resident in Scotland

• MI will only be supplied showing performance, at a Great Britain level, of delivering the functions discharged on behalf of the Scottish Ministers. DWP will not supply data specific to Scotland unless it is currently available and easy to access

• MI required to inform future delivery is outside of the scope of this Agreement

• DWP will notify Scottish Ministers yearly, of the volumes of Carer’s Allowance reassessment Cases left in Scotland

11. Financial Arrangements

11.1 DWP has agreed to absorb the Delegated Expenditure Limit (DEL) costs for this exercise from 26/27 to 28/29. The DEL costs for this exercise will not be recharged to Scottish Government, and no budgets will be transferred. This will not set a precedent for future funding arrangements.

12. Audit

12.1 DWP and the Scottish Ministers will abide by the principles of audit and accountability as set out in the jointly agreed document Scottish Devolution: A Framework for Audit and Accountability as referenced in Section 4 (Derivation) of this Agreement.

12.2 DWP and the Scottish Ministers remain subject to their overall existing accountabilities to the UK and Scottish Parliaments, and their associated audit bodies.

12.3 DWP and the Scottish Ministers will abide by the principles in the Agreement between the Scottish Government and the United Kingdom Government on the Scottish Government’s fiscal framework as referenced in Section 4 (Derivation) of this Agreement: Paragraph 29 of which states that ‘All costs incurred by the UK Government where the Scottish Government is expected to meet the costs will be subject to audit’.

13. Operational Engagement

13.1 Both Parties will work in a practical way to promote a positive shared customer experience. A link between Service Delivery colleagues in Social Security Scotland and DWP will be established to provide an opportunity for ongoing communication and shared understanding between officials on the operational delivery of Carer’s Allowance reassessment exercise to customers resident in Scotland. Both parties will act in the spirit of co-operation, trust, respect and confidentiality.

14. Communications

14.1 DWP, Social Security Scotland and the Scottish Ministers have agreed a communications approach ensuring a seamless customer experience. Communications in relation to Carer’s Allowance customers resident in Scotland in scope of the reassessment exercise will be as set out in the agreed document DWP and Scottish Government Joint Communications Framework as referenced in Section 4 (Derivation) of this Agreement. DWP, Social Security Scotland and the Scottish Ministers have agreed the following principles:

• Social Security Scotland and the Scottish Ministers will notify DWP if they are to issue any communication related to this Agreement, and of any related issues, at the earliest possible opportunity prior to publication/issue

• DWP will notify Social Security Scotland and the Scottish Ministers if they are to issue any communication related to this Agreement, and of any related issues, at the earliest possible opportunity prior to publication/issue

• DWP will not make any changes to Carer’s Allowance reassessment communications to distinguish between people resident in Scotland or England and Wales, other than for the purposes of avoiding confusion around the recovery of debt and Data Subject rights as noted in Section 16 of this Agreement. For the avoidance of doubt DWP will be operating on the basis of business as usual arrangements with regards to communications for Carer’s Allowance reassessment exercise

15. Freedom of Information Requests, Parliamentary Questions, Ministerial Correspondence and ‘Treat Official’ Correspondence

15.1 Each party is to follow existing processes and obligations for requests to that party and having regard to the MoU on Devolution as well as the Concordat between DWP and the Scottish Government both as referenced in Section 4 (Derivation) of this Agreement.

15.2 Each party will assist and co-operate with each other where appropriate to enable each to meet its obligations.

15.3 This Agreement does not supersede any legal obligations under the Freedom of Information Act 2000 (FoIA) and the Freedom of Information (Scotland) Act 2002 (FoI(S)A).

16. Data Subject Rights

16.1 For the purposes of this Agreement, the term ‘Data Subject’ will have the same meaning as in section 3(5) Data Protection Act 2018 (DPA) and as referred to in the definition of Personal Data under Article 4(1) General Data Protection Regulation (UK GDPR).

16.2 The terms ‘Personal Data’, ‘Controller’, ‘Processing’ and ‘Processor’ will have the same meaning as in Article 4 of the UK GDPR.

16.3 All current Data Protection Legislation and guidance will apply, including but not limited to:

(a)  the UK GDPR

(b)  Part 2, Chapter 2 of the DPA 2018 (the applied UK GDPR)

(c)  the DPA 2018

(d)  regulations made under the DPA 2018

(e)  regulations made under section 2(2) of the European Communities Act 1972 which relate to the UK GDPR or the Data Protection Directive (EU) 2016/680 (Law Enforcement Directive)

(f)  the Privacy and Electronic Communications (EC Directive) Regulations 2003, and

(g) the guidance and codes of practice issued by the Information Commissioner

16.4 Requests regarding rights of a Data Subject under Chapter 3 of the UK GDPR will be dealt with by DWP as a Controller in accordance with DWP policies.

16.5 When the Scottish Ministers receive a request pertaining to rights of a Data Subject under the UK GDPR, concerning Carer’s Allowance customers resident in Scotland in scope of reassessment exercise, the Scottish Ministers will acknowledge the request and will forward the said request to DWP within three (3) working days of initial receipt. The acknowledgement will inform the Data Subject that their request has been forwarded to DWP. DWP will then respond on behalf of both DWP and the Scottish Government, in accordance with its business as usual arrangements.

16.6 All other functions exercisable to comply with the current Data Protection Legislation, in relation to Personal Data being processed by DWP for Carer’s Allowance customers resident in Scotland in scope of reassessment exercise, will be exercised by DWP in accordance with its existing practices.

17. Data Controller Arrangements

17.1 DWP and the Scottish Ministers will be Joint Controllers within the meaning of Article 26 of the UK GDPR.

17.2 It is agreed between the Parties that DWP will administer Carer’s Allowance reassessment exercise for customers resident in Scotland on the basis of business as usual arrangements as set out under Section 5 of this Agreement.

17.3 The Processing of all Personal data subject to this Agreement which is necessary for administering Carer’s Allowance assessment exercise for customers resident in Scotland by DWP, will be under DWP’s existing data policies. The DWP Personal Information Charter contains more information about how DWP handles/processes Personal Data.

17.4 For the avoidance of doubt, Scottish Ministers’ responsibilities under Article 26(3) of the UK GDPR, will be fulfilled by referring the matter to DWP, which will respond to the Data Subject in accordance with its existing practices.

17.5 DWP in their capacity as an independent Data Controller, as per this Agreement, will take all reasonable steps to ensure that all information is up to date and accurate. This will be done in accordance with DWP’s business as usual arrangements, as detailed in Section 5 of this Agreement.

17.6 Each party will be responsible for ensuring that their organisation and the data processing they are responsible for is fully compliant with all current Data Protection Legislation.

18. Signatories

Signed by:

Print name: NEIL COULING

A duly authorised officer for and on behalf of the Secretary of State for Work and Pensions

Date: 15/06/2026

Signed by:

Print name: ALLY MACPHAIL

A duly authorised officer for and on behalf of the Scottish Ministers

Date: 19/06/2026

1. Independent Review of Carer’s Allowance Overpayments – GOV.UK and Government Response to the Independent Review of Carer’s Allowance Overpayments – GOV.UK. ↩

2. Independent Review of Carer’s Allowance Overpayments – GOV.UK. ↩