We are very pleased that two important amendments were made to the Coronavirus (Recovery and Reform) (Scotland) Bill as part of Stage 2 last week.

The first amendment is to increase the Protected Minimum Balance (PMB) in a bank arrestment from £566.51 to £1,000. The PMB is the amount that someone is left with after their bank account has been arrested i.e. funds have been taken from it by their creditors. An increase to the PMB was much-needed for this form of diligence as the current amount simply does not leave people with enough money to live on, especially in the current cost of living crisis that is likely to be long-lasting. We don’t think this change would have been possible without a vocal call from the money advice sector, and we were pleased to support and share in asking for this much-needed increase. If the Bill is successful at Stage 3, this change will come into effect on 1 November 2022. The Committee also agreed to further consultation throughout the year as to longer-term improvements that can be made to bank arrestments.

The second amendment agreed is to temporarily maintain the current moratorium period of 6 months, i.e. the time when a person in debt is protected from creditors taking diligence action against them. The 6 month period will remain until the cost of living emergency has subsided, and so we do not yet know how long it will be in place. The amendments also give Ministers the power to alter the moratorium period through regulations, which will be used to reduce the 6 month period when it is deemed appropriate to do so. As yet we do not know what this will change to, but it is very likely that it will be around 12 weeks, but definitely longer than the 6 week period that was previously in place before the pandemic.

Abbey Fleming, Policy and Communication Lead at Money Advice Scotland said

“We are delighted to see these much-needed amendments being approved at Stage 2. There has been a real need to increase the PMB and we’re pleased to see this piece of legislation aimed at recovering from the effects of the pandemic also take into account the ongoing effects of the cost of living crisis. We’re also encouraged to see the current 6 month moratorium period be maintained as ensuring people have enough time to seek help with debt is incredibly important, and keeping the period at 6 months will help people to get the protection they need as it becomes ever easier to experience financial difficulty, through no fault of their own.

“The money advice sector has really come together to push for these changes and we are really pleased to see these amendments being approved.”

The amended version of the Bill will be considered at Stage 3 where the final decision on whether to pass the Bill will be taken.