Draft Bereavement Benefits (Remedial) Order 2022 Debate
Full Debate: Read Full DebateKaren Buck
Main Page: Karen Buck (Labour - Westminster North)Department Debates - View all Karen Buck's debates with the Department for Work and Pensions
(1 year, 7 months ago)
General CommitteesIt is a pleasure to respond to this important order under your chairmanship, Mr Dowd. I thank the Minister for her comprehensive opening remarks.
We are all conscious of the fact that bereavement is not only a personal tragedy for the families concerned, but all too frequently a trigger for major financial risk and sometimes even poverty. It can result in people losing their homes or being at risk of that, so ensuring that at the very least families, and above all families with children, are protected at that difficult time is incredibly important. It is irrelevant to such children, and for the purpose of the order, whether they are in a cohabiting family or one that is legally married. Equal treatment is long overdue and fair, and the Opposition welcome it.
If it is all right with the Minister, I have a fair few questions for her. I am grateful to the Low Incomes Tax Reform Group and the Childhood Bereavement Network, which have produced some helpful notes to guide the Committee on the issue.
To return to the intervention from my hon. Friend the Member for Birmingham, Hall Green, my first question is about the number of people who will be affected by the order, which has consequential implications for take-up. The Childhood Bereavement Network estimates that around 1,800 parents may be able to claim bereavement support payments in the future compared to now, which is welcome. It estimates that around 10,200 parents bereaved before April 2017 and 10,500 parents bereaved after April 2017 may be able to make retrospective claims for widowed parent’s allowance, which makes 20,700 parents in total. Does the Minister recognise that number? Those figures are important in terms of take-up, and in a year or two it will be important to get a sense of whether 5%, 10% or 90% of those eligible are making a claim.
That question also relates to the Minister’s point about how the payments will be publicised. The Minister said that there will be a communications strategy, information will be put on the DWP website, gov.uk and elsewhere, which is all fine, but, critically, parents who were bereaved more than four years ago will have no reason to look at whether they now qualify for the benefit. They will not be aware of it at all. This is not an easy question to answer because there is no obvious way to find such parents, other than going back through DWP records. In some cases, even that option will not available. That calls for a more imaginative approach that uses and supports the expert community and voluntary organisations, faith communities and others who may have been interacting with those bereaved parents at the time of bereavement. It is absolutely critical that in a year’s time we do not find that this welcome initiative to bring fairness to the social security system has simply failed to hit the mark and payments are not being taken up by parents in desperate need and vulnerable children in need. I ask the Minister to think harder about how the Government can make sure that they reach parents to encourage them to make claims.
There is some concern about the way in which applications will be made. There is a window for applications, so we want to make it as easy for people as possible. I think the Minister was confirming that the widowed parent’s allowance applications would need to be made physically, in the old-fashioned way, whereas bereavement support payments can also be made online. We are in 2023, and it worries me that we are relying on that system, especially at the moment when the postal service is not what we would like it to be. The risk is that asking people to make a physical application could lead to some of them falling through the net. I do not quite understand why we cannot make the application process as easy as possible and put everything online—with a back-up, of course, because not everything should be online. We also need flexibility in the system when people make physical applications through the post in good faith but then find that they have not arrived, as has happened with passports, driving licences and all kinds of other applications in the last year or two. Such situations need to be treated sensitively.
Another issue is proving cohabitation, and the Minister confirmed that there is no time qualification for cohabitation to qualify. Will the Minister confirm her understanding of how cohabitation can be proved and what evidence needs to be provided? We know that the DWP is fairly rigorous in proving cohabitation the other way—when it is seeking to take action against parents who are cohabitating while claiming benefits that it does not believe they should receive. How easy will the Department make it for parents to provide that evidence? The critical question is about retrospectivity. If a widowed parent makes a claim for a period of cohabitation—it may not have been a very long period—for several years ago, they may no longer have all the necessary evidence. I am sure all Members of Parliament have had to deal with instances where people are trying to prove that they are in a single household, for a housing application for example, but they do not have the evidence any more and it is sometimes difficult to obtain.
On the important but technical question of qualification periods, the Minister talked about the cut-off dates that related to the McLaughlin judgment. The Childhood Bereavement Network has raised some important questions about the treatment of some groups of bereaved parents who may be disadvantaged compared to other parents in terms of what they qualify for. Its briefing suggests that the current proposals disadvantage cohabiting parents bereaved in the 12 months before August 2018 relative to their married counterparts, as well as parents bereaved more than 12 months before that date. It estimates that a cohabitee parent bereaved on 6 April 2017 would receive £700 in retrospective payments, compared with up to £28,000 for someone bereaved just a day later, and £9,800 for someone bereaved on 30 August 2018. That is quite a difference in benefits over a very short period. I know some form of cut-off date is inevitable, but there is a risk of inequitable treatment in this case.
The JCHR recommended that a fund be established to make ex gratia payments in cases of inequitable treatment depending on the date of qualification. The Government have said that they do not want to do this, but I urge them to think again. It is very possible that, as the claims start coming in, the differences will be really stark, and the Government and MPs will be dealing with some distraught parents who have not received what they thought they would be entitled to.
On the issue of backdated payments and capital, the Minister recognised that the situation is complicated. It is complicated, and it is possible that people will fall foul of it without some clear guidance from the Government. Will the Minister tell us how many people who now qualify are estimated to have been in receipt of another contributory benefit during that time because they were deemed not to be eligible for widowed parent’s allowance? Will those who received backdated widow’s parent allowance now have their previous benefit entitlement offset against the WPA? If so, how will that be done?
We have heard about how lump sum payments will be treated under the capital rules and that recipients should be advised on the various risks. There is a particular risk of potential allegations of capital divestment. We know that there are rules about how people are deemed to have reduced their capital in order to be able to quality for future means- testing. Given the circumstances and the fact that in some cases people will get a capital sum years later, their position will be different from the one they are in now and there is a risk that they will seek to use their capital in a different and less planned way than someone in the immediate aftermath of bereavement, so I urge the Minister to advise how guidance will be given for that to be treated as flexibly as possible so that people do not find themselves in receipt now of a very welcome lump sum payment that they have not had before, only to find themselves falling foul of capital divestment rules in future. Capital divestment is a thing that people do not anticipate and plan for and do not have a great deal of knowledge of, and people should not find themselves falling foul of that.
We only need to look at the news to know that people can very easily find themselves on the wrong side of a tax repayment issue. The Minister is aware of that, but I would like to know a little more about how the Government are seeking to make sure people are very clear about how they will be treated for taxation purposes. We know from the history of tax credits how easy it is for people to get themselves on the wrong side of this and trapped with bills that they had not anticipated and do not have the ability to manage. People need to advised about that and which tax year the payments refer to.
The Low Incomes Tax Reform Group suggested that payments could have been made either net of tax or with an amount reserved back for tax to reduce the risk for the recipient. Did the Government consider that, and have they considered the suggestion from the same organisation that DWP could have shared at least some data with HMRC to help the process be automated in some way?
The order is, of course, extremely welcome. We need to make sure that, of those deemed to be eligible, take-up is there and that people benefit from that. I am slightly unconvinced given the Government do not seem to know how many people will qualify and are on the right page for this, so I hope that there will be some stepping up on that. It is important to recognise the complexity of the tax and benefits arrangements in order to avoid unforeseen negative consequences for people navigating the system. I hope the Minister will be able to respond to those questions.