Draft Bereavement Benefits (Remedial) Order 2022

Marie Rimmer Excerpts

Tuesday 24th January 2023 General Committees

[Mims Davies]

Sorry, my hon. Friend. He is absolutely right, which is why we need to look into individual cases and treat them sensitively. Some people may find retrospectively that someone else is making a claim for a relationship of which they were simply not aware. That is, however, extremely rare. In all our engagement on the order, we have been looking in the round at all the circumstances that could come to pass, so that we can ensure that the decision made is fair, and so that situations in which families later find out things that are new to them can be managed. I hope that is helpful to my hon. Friend, and I thank him for that point.

Transitional protection will ensure that those who are in receipt of widowed parent’s allowance or the bereavement support payment before the date on which the order comes into force do not lose their entitlement for the duration of their award. The Joint Committee on Human Rights asked whether splitting the benefit might be more appropriate in cases of the kind that we are discussing. I am mindful that this is an incredibly sensitive area. If we split bereavement benefits, it would prove complex to administer, and it would be challenging for claimants to understand their potential entitlement before applying. That would be particularly true where claimants were, for example, eligible for different rates under bereavement support payment. We are determined to treat the issue appropriately and get this as right as we can.

Widowed parent’s allowance is treated as income for the purpose of income-related benefits, such as universal credit, and is assessed at the point of award. The order provides for all retrospective widowed parent’s allowance payments, up to the date of the claim, to be treated as capital and disregarded for 12 months or 52 weeks for the purposes of income-related benefits. That ensures that claimants will not lose any existing entitlement to income-related benefit as a result of receiving a retrospective award.

The order also ensures that there is a disregard for the same period for retrospective bereavement support payment awards. The usual rules will apply to future bereavement support payment and widowed parent’s allowance entitlements. We do not propose any changes for the treatment of income tax. Bereavement support payment is already tax-free, and widowed parent’s allowance will be taxed according to the period of entitlement, as per the existing rules.

We will communicate to widowed parent’s allowance claimants to make sure that they are fully aware of any payment under the draft order that may incur an income tax liability. We know that Members are particularly interested in how the Department will work with His Majesty’s Revenue and Customs to ensure that people can deal quickly with any potential income tax liability following the receipt of a payment under the draft order.

Where claimants pay tax as they earn, they will tell HMRC about any widowed parent’s allowance payment, including backdated payments. Claimants will not need to contact HMRC about income tax implications. Claimants who use the self-assessment process will need to declare payments on their tax returns for each tax year or write to HMRC to include back payments on previous tax returns.

The payment of bereavement support payment does not affect a person’s tax credit entitlement. Widowed parent’s allowance will be treated as income for tax credit purposes, as is commonplace for social security benefits. It will be assessed in the year of the payment rather than entitlement, so no adjustment to past years will be needed for these claimants.

In accordance with paragraph 3(1) of schedule 2 to the Human Rights Act 1998, a proposed draft of the order was laid for a period of 60 sitting days, on 15 July 2021, to allow for Members of both Houses and other stakeholders, including the JCHR to make suitable representations. I assure the Committee that Ministers fully considered all the representations made on the proposed draft order before preparing this draft for affirmative resolution. In doing so, Ministers agreed with the JCHR’s recommendation to amend the order to ensure that pregnant widowed parent’s allowance claimants were covered in the same way as those in a legal union. Ministers also agreed with its recommendation to ensure that the implications of the retrospective effect of the order on entitlement to income-related benefits were fully taken into account. Ministers have also included a number of technical amendments in response to comments from the JCHR.

Finally, before I let other Members contribute, I emphasise how easy the payment will be to claim. We know from our evaluation that claimants have had a very positive experience of claiming bereavement support payment, with 97% reporting satisfaction with the process.

[Ms Marie Rimmer (St Helens South and Whiston) (Lab)]

It is a pleasure to serve under your chairmanship again, Mr Dowd. I find this piece of work very rewarding. Certainly in my constituency, we have a lot of queries and upset about this issue. As we are going through certain things retrospectively, would it be possible to ask the Minister for a briefing note for the Committee? However, I sincerely thank her for the clarity that she has provided this morning.

[Mims Davies]

I thank the hon. Lady. This is a complicated but extremely sensitive area. Many of us have had constituents or heard stories about people who have found this to be a particularly painful challenge. We have spent much time liaising with the other place and, as I have laid out today, with people who are very keen to see their views and concerns reflected in the draft order. In the round, the regulations have been welcomed, but I appreciate that the issue is complex and everybody’s situation is also complicated.

I will liaise with the Government Whips administration office and work to issue a “Dear colleague” letter that will spell out the information to all colleagues, so that caseworkers and local teams working with the DWP are clear on entitlement. I thank the hon. Lady for suggesting that.

In terms of the support and satisfaction for the process of claiming bereavement support payments, we are in a good place. As spelled out by the hon. Member for St Helens South and Whiston and as pointed out by other hon. Members, we need to ensure that the next stage is easy for people who have waited, who are concerned and who have individual circumstances.

We have provided a paper claim form especially for cohabitees, an accessible online gov.uk form and the opportunity to call the DWP’s bereavement service. There will also be an option to claim the bereavement support payment online. I commend the order to the Committee and I look forward to colleagues’ comments.