Bereavement Support Payment Regulations 2017
(Limited Text - Ministerial Extracts only)
Read Full debate
Lord Henley
That the Grand Committee do consider the Bereavement Support Payment Regulations 2017.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Henley) (Con)
My Lords, the regulations were laid before the House on 12 January. They provide the details of a new benefit, bereavement support payment, which was first introduced as part of the Pensions Act 2014. Bereavement support payment will replace bereavement allowance, widowed parent’s allowance and the bereavement payment for those who lose a spouse or civil partner on or after 6 April 2017. These regulations set out the amounts to be paid, the duration of payments, payments for those who are prisoners, and the territories in which a person must reside in order to receive the new benefit. I am satisfied that this instrument is compatible with the European Convention on Human Rights.
Losing a spouse or civil partner is a tragic occurrence, and bereavement benefits provide vital financial support during this deeply distressing time in a person’s life. Previous reforms have tended to be limited and in response to specific pressures. No one had really considered how this support fits in with wider changes to the benefit system and, indeed, to the social landscape as a whole. Consequently, the current benefits are out of date, difficult to administer and hard to understand. Reform is essential to simplify and modernise the current system. The history of bereavement benefits is rooted in the Widows, Orphans and Old Age Contributory Pensions Act 1925, at a time when most women were wholly dependent on their husband’s income. If a woman was widowed, her sole source of income would disappear completely, so it was considered necessary at that time to provide a replacement for that income in order for her to survive. Thankfully, that situation is no longer the case, women as well as men are active participants in today’s workforce, and many households are now made up of, and benefit from, dual careers and dual incomes. For those where the loss of a spouse equates to the loss of the sole breadwinner, income-related benefits are available to make sure that nobody is left without sufficient money to live on.
Compared to the current bereavement benefits, bereavement support payment is designed to be significantly simpler with a uniform payment structure and a single contribution condition. The aim is to provide targeted financial support at the time when it is needed most without affecting access to additional forms of support available through other parts of the welfare system. The reform of bereavement benefits has been welcomed by both the Social Security Advisory Committee and the Work and Pensions Select Committee, the latter of which heralded many of the changes as long overdue. In addition to scrutiny by those two bodies, bereavement support payment was also the subject of a public consultation exercise launched in 2011. Responses to this consultation played a major part in the design of bereavement support payment, including the decision to structure the payments as a series of instalments as opposed to a single lump sum and also the decision that bereavement support payment will not be subject to income tax.
The evidence from our public consultation exercise found that the financial impact of spousal bereavement is particularly acute in the early months. Bereavement support payment will therefore provide a significant cash boost for people at this time where they need it the most, with a lump sum followed by 18 monthly instalments. In recognition that those with children may need a greater level of support, a higher rate will be paid to those who are pregnant or who have dependent children at the time they are bereaved. The duration of payments is not intended to equate to the period of an individual’s grief, nor is it intended to provide ongoing income replacement; rather, the fundamental design principle of the new benefit is that, as a short-term payment, it is designed to address the additional costs of bereavement rather than contribute towards everyday living costs. Because they are clearly distinct from income replacement benefits, we will disregard payments of bereavement support payment from universal credit and legacy benefits, as well as discounting them from the calculations which count towards the benefit cap. This will clearly benefit the least well-off as they will, for the first time, be able to receive payments of bereavement benefit in full, alongside any other entitlements. For example, an unemployed widow with one child who is entitled to bereavement support payment could receive £7,350 in the first year. In addition, they could receive the standard allowance and the child element of universal credit, which is more than £7,130 a year. On top of this, they may also be able to access other support such as help with childcare and housing costs.
Lord Henley
My Lords, I thank the noble Baroness, Lady Sherlock, the noble Lord, Lord Jones, and the right reverend Prelate the Bishop of St Albans for their contributions. I hope to deal with their concerns in the course of my speech.
On the first point raised by the right reverend Prelate about the length of time—this was also alluded to by the noble Baroness, Lady Sherlock—as noble Lords will remember, the original idea was that it should be for 12 months. This was extended as a result of the consultation, the comments from SSAC and the Select Committee to 18 months. One of the reasons for this is that it was considered that 12 months was not the optimum period, particularly in the light of its ending more or less on the anniversary of the death. Eighteen months fits in slightly better with that. The same could be said about three years because it also would fall on an anniversary. However, I do not use that to argue against a period that might be longer or shorter. We came to the view that 18 months rather than three years was about right and that thereafter, if necessary, income-related benefits would be more appropriate. The idea is to provide support at the time of bereavement and in the months afterwards, but there has to be a cut off at some point.
The noble Baroness accused us of bad faith when we extended the period from 12 to 18 months and said that the global amount would be a slightly smaller figure. If we extended to three years the same would apply—it would be a smaller figure—and it is better to get it in 18 monthly instalments than over a period of three years. Others may disagree, but judgments have to be made on this issue and we feel that 18 months is about right.
The right reverend Prelate also objected to the fact that there was no automatic top-up in line with inflation. The noble Baroness, Lady Sherlock, also wished to address the point. She will know that bereavement benefits of all sorts have been uprated in the annual Social Security Benefits Up-rating Order 2017, which we will get to later on. She will also know that the basic component of bereavement allowance and widowed parent’s allowance have to be uprated annually, at least in line with price inflation. There has been no requirement to uprate the bereavement payment, which has been frozen since 2001.
Bereavement support payment is a grant paid in instalments, rather than as an income replacement benefit, so it is treated in a similar way to the current bereavement payment. That is what is behind our views on that matter. It will be reviewed annually on a discretionary basis but without expectation that the payment should automatically be increased annually. Again, I imagine that we will want to come on to that later on, when we debate the general uprating order.
The third point touched on by both the right reverend Prelate and the noble Baroness was about extending the payment to cohabitees, as opposed to just those who are married and in civil partnerships. I do not actually know the result of the civil partnerships case that was in the Court of Appeal today.
Lord Henley
I am grateful to the right reverend Prelate for saying that it has been rejected. By that, I take him to mean that it is still not possible for those of the opposite sex to have a civil partnership. Civil partnerships will therefore apply to those of the same sex, and marriages to those of the same sex and those of the opposite sex. We took the view that it was better and simpler to confine it to those groups, rather than to extend it to cohabitees. Cohabitees, as we have always known, have the ability to take steps to rectify their position and become married or, in certain cases, to become civil partners. To add the complexities, which I accept already face cohabitees regarding, for example, income-related benefits, such as UC, to a payment of this sort would not be appropriate. It can be dealt with by people themselves if they wish to regularise their position, which is always important to know.
I can remember some of the debates on various Private Members’ Bills, particularly one which I think was promoted by the noble Lord, Lord Lester of Herne Hill. He said that there was gross ignorance about this matter and that people thought being a common-law wife or husband gave them the same rights. I think that by now, most people should know that it does not give them the same rights; their rights are distinctly different if they are cohabitees. As I said, it would add excessive complications to a benefit of this sort, and I do not see the reason for extending it.
The noble Lord, Lord Jones, asked about the numbers of those who are likely to be affected. In the past, it has been something of the order of 40,000 a year and we have no reason to believe that it will be any different. I can add to that one other figure, which will be of interest to him and the Committee: of those 40,000, some 8,000 also have dependent children. That figure might or might not surprise the noble Lord. I was slightly surprised, since we are talking about claimants of working age, that it should be as low as that. But that is the figure, and I have no reason to believe that it will change.
Finally, I can confirm to the noble Baroness, Lady Sherlock, that bereavement support payment will be disregarded for universal credit and for income-related benefits. I think I made that clear in my speech. If even Homer nods, perhaps even the noble Baroness occasionally nods.
Lord Henley
She was nodding in a different way but anyway, I can confirm that it will be disregarded, as it will be for the benefit cap.
Finally, the noble Baroness talked about the time for claiming the benefit and the fact that the monthly payments must be claimed within three months but that in terms of the basic amount, they had a full year. The simple answer is that for monthly payments it is appropriate to have a cut off that is shorter than for the lump sum. I do not believe—this is the important thing—that there is much ignorance, once people are bereaved, about benefits of this sort. Certainly the evidence we have and the evidence we have had in the past, which implies a very high take up of this benefit, seems to suggest that most people get to know about it very quickly. It is one of those things that, for example, I am sure undertakers know about and will advise on, as will others.
I hope that, with the assurance that I may find that there are one or two points I have not answered, the Committee will accept the regulations.
Motion agreed.