Draft Bereavement Benefits (Remedial) Order 2022

Natalie Elphicke Excerpts

Tuesday 24th January 2023 General Committees

[Mims Davies]

Thank you, Mr Dowd. I think that, as I go on to talk about the qualifying numbers and the way this measure will be applied, it will be helpful if I look at those details and give the hon. Member for Birmingham, Hall Green a confirmed answer in writing, because this is quite complicated and we of course need to be clarifying the numbers.

To go back for the benefit of my hon. Friend the Member for Reigate, who has just joined us, this draft order applies to those who would have been entitled to either of these benefits on or from 30 August 2018. I recognise that that is a particular point of interest for hon. Members. I understand that, so I want to reiterate to Members why we have chosen that date. It was on 30 August 2018 that the Supreme Court, in the McLaughlin case, ruled that widowed parent’s allowance legislation was incompatible with the European convention on human rights. That was in effect the date on which the incompatibility was accepted as final. It is exceptional to make social security changes retrospectively, and we consider that a logical and fair start date. For bereavement support payment, where the death occurred before this draft order becomes law and the claim is received within 12 months of that date, claimants will get the full amount due to them. If the claim is received later, the claimant will get up to three backdated monthly payments, plus any remaining monthly payments due.

[Mrs Natalie Elphicke (Dover) (Con)]

My hon. Friend is helpfully setting out the time limits. If I have understood correctly, within 12 months is for the higher claim, but it has been more than four years—four and a half years—since the relevant case. Can the Minister confirm whether, in the unfortunate situation in which the surviving parent has died—is deceased—a claim is possible in relation to payments that would otherwise have been made?

[Mims Davies]

I fully appreciate that there has been a long gap between laying the proposed draft and the draft order. During the period, there has been a small cross-departmental team of officials looking at exactly the point that my hon. Friend makes, in terms of the complexity and ensuring that the policy is drafted properly and the implementation issues are covered. It is important that we get this right, and that throughout the process, the remedial order is made the priority for the Department to look into. My hon. Friend is absolutely right that we are looking at the issue. That goes to the point about who will be captured. I will be happy to confirm that more fully later in my comments, if that helps.

When deaths occur after the order comes into force, the bereavement support payment will be paid, subject to the usual claim time limits, which are 12 months for the initial lump sum, and three months for each instalment. It will help the Committee to learn that claimants will be eligible for widowed parent’s allowance if their partner died before 6 April 2017 and they continued to meet the entitlement conditions on 30 August 2018. They, too, must claim within 12 months of the date on which the order comes into force. They may also be entitled to ongoing payments if they continue to meet the widowed parent’s allowance eligibility criteria at the point of claim. I hope that gives my hon. Friend clarity.

The extension of the benefits to cohabiting partners means that there may be cases in which more than one person claims for the same death. That could apply in cases of polygamy, or of people dividing their time between two households, or where a separated spouse no longer lives with the deceased. As hon. Members can appreciate, this is a complex area, and my officials have been working hard to develop an approach that not only balances the need to protect taxpayers’ money with the contributory principle, but reflects people’s real-life circumstances. In such cases, the order proposes that we pay just once per death, prioritising the person who was living with the claimant on the date of death. If there are claims from different addresses, entitlement would be established as part of the normal decision-making and appeals processes.

In very rare cases, more than one potential claimant may have been living with the deceased on the date of death. Here, entitlement will be decided according to a hierarchy that is intended to reflect which claimant had the most established relationship with the deceased, as that person would usually bear the majority of the bereavement costs. Should that leave more than one potential claimant, the Secretary of State would determine who was entitled to the benefit.

--- Later in debate ---

[Mims Davies]

I thank all members of the Committee for their important contributions, challenging insights and constructive points, particularly from the hon. Member for Westminster North.

Despite the complex nature of the topics discussed today, at its core the draft order aims to achieve something quite simple and very important—parity and fairness—to ensure that surviving partners with dependent children can access the same financial support as those who were in a legal union with their deceased partner. I am content that this order achieves that purpose, and I am glad to see that it has been welcomed and agreed by the JCHR.

Under the draft order we propose—I hope I have made this clear this morning—a sympathetic approach that recognises the challenging circumstances, as outlined by the hon. Member for Westminster North, that follow a bereavement. In fact, in this case, several years later, we are tackling all of those challenges.

As Members will recognise, losing someone close is incredibly difficult. That is especially so when a child or children lose a caring parent. We appreciate that bereaved people will feel that such additional support is long overdue. From my work at DWP, I know that the loss of a parent and a close loved one is an extremely adverse childhood experience. I and my colleague in the other place, Lord Younger, vow to do what we can to mitigate that effect.

The hon. Member for Westminster North kindly indicated that she intended to raise lots of complicated points this morning, and I will do my best to address them. I know that we are dealing with a complicated matter when Hansard sends a message saying, “Please can we have your notes”. I will try to address all the detailed points raised by the hon. Lady.

By giving individuals who have already lost a partner a full 12 months to claim from when the order becomes law, introducing a disregard to protect existing entitlement to an income-related benefit where a retrospective lump sum is due, and introducing an approach to evidencing that reflects the reality of people’s lives, I hope that claimants will find the process of benefiting from the proposed change straightforward and sympathetic. As I mentioned in my opening speech, this draft order also ensures those individuals with dependent children who are sadly bereaved after the order becomes law can access the higher rate of bereavement support payment. We have built on some of the recent improvements that we have made to the core bereavement support payment offer to ensure a streamlined service for claimants. That includes providing an option to submit a claim online.

I echo the hon. Lady in thanking all interested organisations, including the Childhood Bereavement Network, Widowed and Young and the Low Incomes Tax Reform Group, for their fantastic work in support of this change, which they have welcomed and assisted.

On the expected numbers of claimants, I do not want to be held down to exact figures because this is a moving situation, but we expect the proposed changes to increase the BSP and WPA caseloads by between 4,000 and 5,000 a year. That is the projection running through to 2025-26. Obviously, we at DWP need to manage that correctly, so that people’s expectations and experience of engaging with us is likewise managed.

On how the retrospective elements of the remedial order will work, we proposed an extension of the WPA and a higher rate of BSP to cohabitees with dependent children, and that will apply from 30 August 2018.

[Mrs Elphicke]

On the retrospective nature of the order, if a married spouse had made a claim and, as result of the retrospective proposals, a second person was subsequently also entitled to make a claim, what would be the position of the person who had already been paid by reason of being the spouse?

[Mims Davies]

I understand my hon. Friend’s point. She has described a secondary, competing claim, and I think it is important that I set out my response to her and fellow members of the Committee in writing, because it is an issue that we are closely studying in terms of its management. We are looking at cases sympathetically, but I think I need to set out in writing the detail of how they will be managed. I think that would be helpful.

[Mrs Elphicke]

Can my hon. Friend clarify whether someone who was entitled as the married spouse would have to repay any sums by reason of the retrospective application?

[Mims Davies]

I can see some slightly puzzled looks, which is why I am keen to give my hon. Friend a proper response, rather than one in Committee. She makes an important point. I cannot see that in my notes, so there we go. I am sure that the officials present will send something over to me if they can give further clarity now. This morning’s conversation has absolutely shone a light on the fact that we are dealing with a mixture of retrospective, family and changed situations—as the hon. Member for Westminster North mentioned—and that is why we are trying to come up with something that is fair and right, based on what we have learned from engagement with stakeholders and what occurred in the court cases. I hope that will help.

The hon. Member for Westminster North made a point about proving cohabitation. The onus will be on the claimant to prove cohabitation, but we intend to use the existing DWP IT systems to verify information provided by the claimant as part of their claim. If the information provided cannot be confirmed, the claimant will be required to provide two forms of documentary evidence. We will accept evidence in line with that currently accepted by the DWP for proof of address, for example. That approach follows the existing evidence strategy for married couples and those in civil partnerships. Where claimants are unable to provide documents and the claim is retrospective, we will take the customer declaration on the telephone. That is a pragmatic and compassionate approach, which minimises the impact on the claimant, is deliverable and balances the risk of fraud. I hope that is helpful to the Committee.

On the implementation of the order and DWP staffing, the changes will be delivered by the DWP bereavement services team. Officials have been developing guidance and training on other products to ensure operational readiness on the go-live date. Even this morning, however, we have discussed more points we need to ensure are covered. Forgive me if I have missed anything. I am happy to pick things back up with the operational team.

We have spoken about the time taken to lay the remedial order. I hope that the Committee and those in the other place understand why it has taken some time. It is important to recognise not only the time taken, but the amount of challenges that we need to balance against that in getting it right. On the long gap, some cross-departmental work will ensure that the policy of the drafting works and that, ultimately, the implementation issues are battled through, taking full consideration of all the points. It is vital to get this right, and that remains the absolute focus.

On making a claim, we do not routinely keep details of people who have claimed before and been refused benefits on the basis of being in a cohabiting relationship. We therefore do not intend to contact previous claimants directly. Any claimant whose previous application was rejected, however, will have the opportunity to make a new claim. That is where the communication point—engagement with partners and stakeholders—will be important. We will ensure that the information on gov.uk is fully updated to help support people in making that new claim.

On the ease of claiming, we already know that the process of claiming bereavement support payment is quick, easy and well explained. We published a recent evaluation of that on gov.uk in December 2021. Overwhelmingly, claimants have reported a positive experience when claiming bereavement support—as I said, 97% satisfaction with the current claiming process. I do not want that to change because of the complexity of what we are discussing this morning. We are very mindful of that.

On the size of the award, the differences and the inequitability—if I have that word right, early on a Tuesday—I will write to the hon. Member for Westminster North. On deaths occurring before the order comes into force, the claimant has 12 months to apply to get their full entitlement. If a claim is made after that period, the usual rules will apply. Under those, a claimant can normally receive three backdated monthly payments—as I said earlier—of BSP, provided that the claim is made within 21 months of the order coming into force. The 12-month window provides a generous timescale for a prospective claimant to apply for either a WPA payment or the bereavement support payment but, for deaths occurring after the date of the order, normal rules will apply.

With regard to extending payments for the ex gratia scheme, it is our intention that the families should receive the same amount of the higher rate of BSP or WPA as their married counterparts, and only in respect of the entitlement after the August date, which goes back to the point of the hon. Member for Westminster North. It is not routine for social security changes to be made retrospectively and, as I say, we consider the date of 30 August 2018 to be logical and fair.

The hon. Member for Westminster North also mentioned the focus on online claims. The widowed parent’s allowance is a complex legacy benefit that has been closed to claims since 6 April 2017. Under the order, claims for WPA will be eligible only for a 12-month period, after which it will then close again. On that basis, it would prove disproportionate to introduce a brand-new online claim route that would have to be set up from scratch. Instead, we found that ensuring we have an online claim form that is as simple as possible, with clear guidance, is probably the best and most straightforward way forward. However, I take the points raised by the hon. Lady.

With regard to the claimants’ use of their retrospective payments being viewed as deprivation of capital, as spoken about by the hon. Member for Westminster North, we have a duty to ensure that means-tested benefits are paid to those who need them when they need them most and also to ensure fairness to the taxpayer. The deprivation of capital rules are intended to apply to those who act with the intention to access benefit or to get more benefit. Therefore, provided that any capital is spent reasonably and not with the purpose of accessing or getting more benefit, claimants should not be treated as having notional capital, which is taken into account in the same way as normal capital when they get a retrospective lump sum. I hope that that helps the hon. Lady.

With regard to how payments under the order will be treated for income tax purposes, we do not propose any changes on how either benefit is treated for income tax purposes, as I said earlier. BSP is already tax-free, and WPA will be taxed according to the period of entitlement as per those existing rules. To once again address the point raised by the hon. Member for Westminster North, this is a matter that needs to be spelled out to the Committee and both Houses to help those in that particular scenario.

I hope that I have covered all the points raised. Anyone who gets a benefit will be protected if in receipt on the day that the order goes live. It will be paid until the end of the award for unmarried claimants, which goes back to the point of the hon. Member for Westminster North. If and when the order goes live and someone is paid, and a second, rightful claimant comes forward, we will stop payments but we will not claw back any benefit, which was the point made by my hon. Friend the Member for Dover. Again, clarity on such particularly complex scenarios will be very important.

I thank Committee members for their important, constructive and helpful engagement. I emphasise to any of those who feel that they may be affected, those who represent stakeholders and those concerned regarding the order that the claim will be easy to make. It will absolutely focus on getting it right for all those who should be entitled. We have provided a paper form especially for cohabitees and an accessible, online gov.uk form as well. I reiterate DWP’s engagement with Citizens Advice on help to claim. Anybody who is struggling should look at the benefits calculator on gov.uk and the support for households with the cost of living as well. Remember that the DWP bereavement support service is there for people to call, and there will be an option to talk to somebody and claim online. I commend the order to the Committee.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Bereavement Benefits (Remedial) Order 2022.