Social Security Scotland is currently unable to recover some historic benefit debts after an agreement with the Department for Work and Pensions (DWP) ended earlier this year.
Social Justice Secretary Shirley-Anne Somerville confirmed the debts relate to payments originally made by the DWP before benefit cases were transferred to Social Security Scotland. She said the two governments are now working to transfer the necessary case information and Social Security Scotland will take responsibility for recovering the outstanding money once that work has been completed.
However, Ms Somerville told MSPs that because the agency agreement covering debt recovery ended on March 31 and the required data has not yet been transferred by the DWP, the debts cannot currently be recovered.
Scottish Parliament update
The update came in response to a question from Scottish Conservative MSP Craig Hoy during portfolio questions in the Scottish Parliament on Wednesday.
Ms Somerville said: "The Scottish Government always seeks to protect the public purse and recover overpayments wherever it is cost effective and reasonable to do so. Those particular cases are no different.
"Those debts arose from payments made by the Department for Work and Pensions prior to the transfer of cases to Social Security Scotland.
"We are now working with the DWP to transfer the necessary case data, and we will assume responsibility for that debt recovery when that work is complete.
"As the agency agreement underpinning debt recovery ended on 31 March and the necessary data has not yet been transferred from the DWP, it is not possible to recover debt at this point."
Historic benefit debt in Scotland
The issue relates to historic debts associated with benefits which have transferred from the UK Government to Scotland.
Previous evidence to the Scottish Parliament put the total historic devolved benefit debt at around £36 million.
Giving evidence to Holyrood's Finance and Public Administration Committee last year, then Finance Secretary Shona Robison said the figure covered historic devolved debts that had either transferred to the Scottish Government under devolution or accumulated while the DWP continued administering benefits under agency agreements.
The £36m figure should not, however, be taken as the current amount affected by the latest delay, as no updated figure for the outstanding debts covered by the data transfer was given during Wednesday's exchange.
Mr Hoy asked how quickly the overall debt level would be brought down and called for the Scottish Government to introduce a benefit fraud and overpayment dashboard showing whether debts were rising or falling.
Ms Somerville said Social Security Scotland already publishes information and data and stressed that the level of fraud in the Scottish social security system is "exceptionally small", particularly for disability benefits.
She added: "However, where there is fraud, it will be taken seriously and the powers that the agency has will be used to their full extent."
Social Security Scotland debt recovery
The temporary problem does not mean Social Security Scotland has stopped recovering benefit overpayments generally.
In a separate parliamentary answer in June, Ms Somerville said the agency has legal powers to make enforced deductions and pursue civil recovery where appropriate.
She said Social Security Scotland had expanded the use of its available recovery powers from January 2026 for existing and newly accrued debts, including developing options for enforced recovery and beginning civil recovery through the courts.
The current issue specifically concerns historic debts arising from payments made by the DWP before cases were transferred to Social Security Scotland.
No date has been given for when the transfer of the necessary DWP case data will be completed or when recovery of those debts will begin.
