Mental Health Moratorium
Mental Health Moratorium
The introduction of a Mental Health Moratorium in Scotland, which will provide special protections from debt enforcement for those individuals with serious mental health conditions, has received broad support from stakeholders and the Scottish Parliament.
It was recommended by a stakeholder-led working group during stage 2 of the review of Scotland’s statutory debt solutions. Subsequently, the Social Justice and Social Security Committee proposed that the Scottish Government should implement this change in their report Robbing Peter to pay Paul: Low income and the debt trap.
Early consultation responses
In the Bankruptcy and debt advice review: consultation published in November 2019, 89% of respondents believed the Scottish Government should consider a separate moratorium for those receiving mental health crisis care.
In a further consultation Scotland’s statutory debt solutions and diligence – policy review response published in August 2022, 93% of respondents agreed with the proposal to collaborate with mental health and debt specialists in developing the detail of a Mental Health Moratorium.
The working group
In January 2023, the Mental Health Moratorium Group was formed to deliberate on how a Mental Health Moratorium could operate in Scotland. The group, which comprises of relevant sector experts, considered and discussed various aspects of a Mental Health Moratorium.
This resulted in the publication of the Mental Health Moratorium working group - report of recommendations.
The Mental Health Moratorium Consultation
The working group’s report, along with other stakeholder engagement, formed the basis for the Mental Health Moratorium Consultation. This was published in November 2023 and asked for stakeholders’ views on how a Mental Health Moratorium could work in practice.
The responses to this consultation assisted in developing draft regulations which will define the framework for the Mental Health Moratorium.
Legislation
Section 1 of the Bankruptcy and Diligence (Scotland) Act 2024 requires Scottish Ministers to create a moratorium on debt recovery action by creditors against individuals who have a mental illness. This is an enabling power which lays out the framework for the moratorium.
The detail of the process will be provided in secondary legislation.
Draft regulations
On 17 May 2024, Ivan McKee, Minister for Public Finance shared a draft of the Debt Recovery (Mental Health Moratorium) (Scotland) Regulations 2024 with the Economy and Fair Work Committee to allow the Scottish Parliament time to scrutinise the regulations.
These draft regulations reflect extensive work undertaken to engage with stakeholders from all relevant sectors, building on the responses to the earlier consultation, which itself was largely based on the Mental Health Moratorium working group’s report of recommendations.
Following feedback received, the draft regulations were amended and were subject to a full public consultation.
- Debt Recovery (Mental Health Moratorium) (Scotland) Regulations – draft: consultation – published 9 December 2024
- Summary of responses report - published 9 July 2025
AiB are now engaging with stakeholders on specific areas raised in the consultation responses where further discussions are required to bring agreement across the stakeholder community.