Draft Bereavement Support Payment Regulations 2017

Alex Cunningham Excerpts

Monday 27th February 2017 General Committees

[Alex Cunningham (Stockton North) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hanson. As the Minister said, the draft regulations will enact provisions in the Pensions Act 2014 introducing a new single payment to replace bereavement payment, bereavement allowance and widowed parent’s allowance for those whose spouse or civil partner dies on or after 6 April this year. There is tremendous merit in simplifying the approach. The Government argue that they are acting with the benevolent intention of modernising the provisions and increasing simplicity for those who are bereaved and seeking support. It must therefore be merely a matter of chance that the measures proposed in the regulations make a significant saving for the Government of approximately £100 million a year. I hope that the Minister and the Chancellor have recovered from their shock at that substantial bonus for the Exchequer.

Despite the Government’s warm words, this is a further austerity measure that is to the detriment of grieving families. We have serious concerns about the proposals. Although we recognise the need for simplicity and change, we do not support these reforms, and we have committed to reversing them under the next Government as the first step towards a wider review of support for the bereaved. Our direct concerns include questions about the shortened timetable; the impact of universal credit conditionality after the initial six-month grace period; the bizarre decision not to uprate support in line with inflation; and, finally, cohabiting couples. Let me deal with each concern in turn, beginning with the shortened timetable.

Under the current system, widowed parent’s allowance is paid to a bereaved parent until their youngest child leaves full-time education. The thorough and helpful analysis provided to hon. Members by the Childhood Bereavement Network has found that the median claim made was for between five and six years’ support. There is clear logic and an evidential basis for providing social security support to bereaved families while children are growing up: given the emotional distress that they will have to process, the child should be protected as well as possible from the financial implications of the tragic event of a parent’s death. Evidence suggests that there is a late effect of bereavement, with some children showing new and greater difficulties two or three years after the death of a parent. Indeed, the same study, which analyses the most robust longitudinal survey available, found that the availability of the consistent, nurturing presence of the surviving parent was one of the strongest predictors of bereaved children’s emotional health and behaviour.

The regulations have the potential to compound the grief that children go through, as well as that of the surviving parent. Let us face it: parenting is hard enough at the best of times. I can only imagine what it is like for people who are left behind, particularly with children, never mind putting financial pressure on top of all that. In 2015, the current support helped 40,000 children who had lost a parent; it is estimated that the regulations reduce the average award by £17,000. Is that really what the Government and the Prime Minister mean when they talk about helping hard-pressed families?

The Government originally planned to provide only 12 months’ support, but increased that to 18 months’ eligibility at the behest of the Work and Pensions Committee. That is welcome, but we question the basis for drawing the line at 18 months—a much shorter time than is currently provided for. Would it not be better for the length of support to remain the same, to ensure the best possible outcome for the child in this tragic and distressing situation? That would seem a sensible way of using the savings that the Government are making, given that they argue that this is not an austerity measure.

The Government have so far ignored our calls to scrap these cuts, preferring to pocket the £100 million that they happen to be saving from this measure. Perhaps the Minister would at least consider adjusting the Government’s actuarial assumptions and extending the period of eligibility for support, but paying it at a slightly lower amount.

On the interaction with universal credit, the Government have argued, and the Minister has said, that bereavement support is not an income replacement but a lump sum, followed by monthly instalments, to address the additional costs of bereavement. This appears to be a very murky distinction. I would like to see the Minister try to draw us a diagram—a Venn, perhaps. Nevertheless, this justification allows the Government to point to universal credit as a mechanism that kicks in to support bereaved families following the now much shorter period of social security provision. The Government have agreed to exempt the bereaved from work search requirements for six months in the light of their circumstances, and to take what they regard as a “flexible” approach to conditionality thereafter. In practice, as I understand it, this flexibility means that claimants can request an additional month every six months for the two following years.

We do not believe that obliging parents to return to work six months after a bereavement is in the best interests of the parent or the bereaved child. If the Government accept that the risk of serious distress remains high for up to two years more, why place bereaved families under the pressure of continuously having to prove themselves? This is a further example of the original policy taking a more compassionate approach. Most bereaved partners retain work, or return to or enter it after 18 months. If the Government press ahead, surely a more pragmatic compromise would be to exempt bereaved families from conditionality for that period, and not just for six months as is proposed. Given the evidence, will the Minister not just scrap this policy now, or at the very least commit to looking again at the period of initial exemption from universal credit, and consider an extended exemption?

On uprating, it was confirmed in the other place by my noble Friend Baroness Sherlock that the Government do not believe that the bereavement support payment should be uprated in line with inflation. The Minister in the other place suggested that as, in the Government’s view, this is a grant payment rather than a social security entitlement, there was no precedent for uprating the amount paid in line with inflation. At first glance, this seems odd from the Government. Usually, social security rises in line with inflation to ensure that vulnerable groups and those on the lowest incomes do not find themselves ever worse off as time goes by. Surely no one in this House wishes to see support for those suffering grief become insufficient, so why will the Minister not agree to meet the relatively small additional cost of uprating?

Finally, I turn to the point regarding cohabiting couples—another unfairness that bereaved partners have raised with MPs—which was also debated in the other place. Under these regulations, the children of couples who are married will be eligible for support, whereas those whose parents cohabit will not. Estimates by the Childhood Bereavement Network suggest that this could leave as many as 2,000 families ineligible for support. That seems a very archaic distinction and grossly unfair. It penalises bereaved families for their decision not to get married. For decades, the principle that children should not be disadvantaged by the choices of their parents has played a central role in Government policy making, and contributed to our society’s sense of fairness and social justice.

Here, yet again, we see the Government cast that principle aside in favour of an arbitrary value judgment. I cannot see any justification for why a bereaved parent who lived with a now-deceased parent should not receive the same entitlement as he or she would have had the two been married. Indeed, the Department for Work and Pensions family test includes cohabiting couples within its definition, which has prompted the Social Security Advisory Combmittee to call BSP “incompatible” with the Department’s own framework. Perhaps the Minister will respond to that point.

The armed forces pension scheme successfully uses a definition of “eligible partner” for entitlement to pensions, while tax credits and means-testing can account for cohabiting couple claims. It does not, therefore, seem beyond the administrative capability of the Government to include families with cohabiting parents within eligibility for bereavement support. Doing so under the BSP system being introduced in April would cost about £21.6 million a year—a fraction of the saving being delivered to the Treasury. Labour has committed to reviewing how cohabiting couples can be included in support for the bereaved. Will the Government start by ensuring that they are included here?

In conclusion, Labour Members believe that the reforms only serve to worsen the position of those suffering bereavement, for the many reasons I have outlined. If the Government do not want to accept what I say, perhaps they will accept the words of eight-year-old Sam, who wrote to his MP:

“I am writing to inform you that reducing the money of the widowed will cause panic and worry. The Widowed Persons Allowance is paid for by the person who has died.”

Sam goes on to say that he still feels flooded with sadness, four years after his father’s death, and describes how the WPA enabled his mother to get back to working as a teacher after two and a half years—something that would not have happened under the proposed new scheme. He says:

“WPA means that mum can still do my drop offs and pick ups at school. She can talk to my teacher if I am feeling sad or poorly.”

Out of the mouths of babes, Mr Hanson.

Those failures must be resolved by the Government if we are to provide a strong social security system for those suffering the intense financial and emotional distress of bereavement. If there is no action now, Labour will commit to scrapping the measures as a first step towards a review providing justice for the bereaved. I ask the Minister to consider again the issues I have raised, in the best interests of the bereaved families who need our support in facing the future.

--- Later in debate ---

[Caroline Nokes]

I thank hon. Members for their contributions. As I have already stated, the Government are absolutely committed to supporting those who have lost a spouse or civil partner; financially in the shorter term by way of these payments, and then practically, if and when it is appropriate, to return to employment.

I express my appreciation for the consideration that hon. Members have given to these regulations, in what I see as the first step to ensuring that we align bereavement support with other welfare policies. I want to respond to comments made by hon. Members and the shadow spokesman. We do not believe—nor could we—that the period of payment should be equivalent to the period of grief following spousal bereavement. We heard from several hon. Members that grief is not linear; it impacts different people in different ways and at different times.

We learned through the consultation process carried out with SSAC and the Work and Pensions Committee, as well as the wider public consultation, that grief will impact at different times in different ways. It will particularly impact on anniversaries. That is one reason we listened to the comments of the Work and Pensions Committee and chose to extend this provision from 12 months to 18 months, so that there would be no coinciding with the anniversary of the death.

It is right to put on the record that we considered providing a simple, lump sum payment at the moment of bereavement, which could be described as a death grant. However, the consultations said that was not wanted and that there should be some level of ongoing support during those critical first few months.

Bereavement support is designed to support people with the additional costs associated with bereavement, rather than to provide an income replacement. That is a really important distinction to make. Income-based benefits are more suited to provide the longer-term assistance with everyday living costs. By investing an additional £45 million, the Government are seeking to provide financial support for the acute period to facilitate the process of readjustment.

[Alex Cunningham]

The Minister heard the quotes I used from young Sam, who tells us that he is still hurting after four years. People can hurt with bereavement after almost a generation has passed. Surely there is some concession to be made by the Government for the likes of Sam, whose mother took two and a half years to get back to work and still needs some support to drop him off and pick him up from school.

[Caroline Nokes]

I thank the hon. Gentleman for that. I was going to move on to refer to Sam’s comments. Like the hon. Gentleman, I have seen a copy of the letter that he sent to his MP, and there are some important reflections on that. On universal credit, it is important to note that the conditionality can be lifted or someone can be completely exempted. It is important to recognise in the arena of universal credit that we want a much more tailored relationship between individuals and their work coaches.

[Alex Cunningham]

Will the Minister explain how somebody can be exempted unconditionally into the future?

[Caroline Nokes]

By discussion with their work coach. That is simply the way we expect that to happen. People will be able to develop that relationship and ask for that exemption. That is really important, reflecting what the hon. Gentleman, the hon. Member for Islwyn and Sam have told us: grief can strike at any time. It is not linear or necessarily over in the first 18 months, and we are not suggesting that it is.

[Alex Cunningham]

I have not seen anything offering guidance to work coaches. Will the Minister publish guidance to work coaches in the Library so that we can understand the advice that people are getting and how they can ensure that they get the support they require?

[Caroline Nokes]

We will be happy to publish that guidance when the legislation has been debated and completed.

Extending the provision of bereavement support payment to cohabitees was discussed during the passage of the Pensions Act 2014. Indeed, the eligibility criteria of a legal marriage or civil partnership with the deceased form part of that Act. The eligibility of cohabitees was therefore fixed in the primary legislation and is not a matter for these regulations, but I am happy to explain the decisions that Parliament took on eligibility in the Act. Marriage and civil partnership are legal contracts that are associated with certain rights, including inheritance and recognition in the tax system. Extending eligibility to cohabitees would not only increase spend but be complex to administer. Having to prove cohabitation at a time of bereavement could be a lengthy and complex process and might cause additional distress, which we seek to avoid.

Critics have suggested that those who choose not to formalise their relationship might be treated unfairly, since they can be treated as a couple for income-related benefits but not for contributory benefits. However, income-related benefits serve a very different purpose: the ongoing day-to-day needs of a household, irrespective of whether the relationship is formal. When assessing entitlement to income-related benefit payments, the state rightly assumes that couples have joint outgoings and share resources such as earnings or other income, whatever the legal status of their relationship. The position is different for bereavement benefits because they are contributory benefits; the founding principle of the contributory benefit system is that all rights to inheritable benefits derived from another person’s contribution are based on the concept of legal marriage or civil partnership.

[Alex Cunningham]

Surely if a man and a woman live together, have children together and are on the electoral register together, they are a couple for all intents and purposes. Why on earth are we penalising the child? I cannot understand why we can make the exception in some areas of benefits but not in this one.

[Caroline Nokes]

As I have explained to the hon. Gentleman, that question was discussed and debated during the passage of the Pensions Act 2014, in which the eligibility criteria for contributory benefits are clearly set out.

[Alex Cunningham]

I am sorry to be such a pain to the Minister, but if the person who has died has been a contributor throughout their working time, surely his or her children are entitled to something from that contribution.

--- Later in debate ---

[Caroline Nokes]

I thank the right hon. Lady for that suggestion. I also thank my hon. Friends the Members for Lewes, and for Thornbury and Yate, who wrote to me on behalf of their constituents Heather Smith and Sarah Metcalfe to make exactly that point. I am conscious that the suggestion comes from the Childhood Bereavement Network, which has been in touch with me personally over the last few weeks.

When we considered the proposals, as I said originally, we considered making a one-off grant at the outset, but that was rejected by both the Social Security Advisory Committee and the Work and Pensions Committee. They suggested a period of 18 months, on which we consulted the Childhood Bereavement Network. I can see the merit in considering changing it to three years, but that would halve the monthly payments in the first 18 months. We did not think that gave families the best chance of lessening the fiscal impact of losing a spouse’s income. We considered it, but we came to the view that we should adopt the Work and Pensions Committee’s suggestion of 18 months.

[Alex Cunningham]

I do not know whether the Minister has acknowledged the £100 million saving, but surely it would go some way toward providing the extension to which my right hon. Friend the Member for Don Valley referred.

[Caroline Nokes]

The hon. Gentleman will of course be aware that over the first two years of the proposed reform we will spend an additional £45 million. Any savings will be for future Governments to reinvest as they choose.

It is important to emphasise that nobody in receipt of the current bereavement benefit stands to lose out as a result of the reforms. Recipients of the current benefit will continue to receive it for the natural lifetime of their award. Furthermore, households with dependent children will receive higher payments in recognition of that fact. Analysis shows that more people stand to gain than lose from the changes, particularly the least well off, because bereavement support will be paid on top of any income-related benefits that the household receives.

As I said, we are disregarding bereavement support payment in the calculation of other benefits, which will ensure that the immediate additional costs of bereavement are met while those requiring further support will be able to obtain it from other parts of the welfare system that are better placed to provide longer-term, means-tested financial assistance. As various Members have mentioned and I have confirmed, conditionality can be tailored through the ongoing relationship with Jobcentre Plus according to a claimant’s personal circumstances.

I meant to mention Sam—apologies for not having done so. I was particularly moved by his letter and thought that he conveyed his situation both movingly and incredibly intelligently. One can only feel for a child who has lost their parent. I must emphasise that families such as his, which are currently in receipt of the benefits as they stand, will not lose. Nothing will change for them. That is an important distinction to make. As I said, it was a benefit system meant to recognise widows—women, not men—way back in the 1920s. It is important that we heed the words of the Select Committee, which said that this reform and modernisation was well overdue.

In conclusion, I reassure hon. Members that this Government have the welfare of the bereaved and their families at heart. There can be absolutely no question but that the loss of a spouse is tragic, and it is doubly so for families with children. There can be no time limit on grief for such a loss, and nor is there a pre-defined way in which grief will manifest itself, but where we can help, we will do so. We remain committed to supporting widows and widowers to adjust to their new circumstances and to providing financial help in the difficult months following their loss. On that basis, I commend the regulations to the Committee.

Question put.