Support for the Bereaved

Stella Creasy Excerpts

Thursday 2nd March 2017 Westminster Hall

[Stella Creasy (Walthamstow) (Lab/Co-op)]

I am delighted to take part in the debate. I would normally have been in the Chamber for the debate on International Women’s Day, but I am here to speak about widowed parent’s allowance on behalf of two of my constituents in particular. They are here today, and their voices need to be heard in debates such as this.

Theirs are the voices of women who never wanted to be in the position they are in and who never expected to claim widowed parent’s allowance—one is not, which I will come to. Tragedy struck their families in the most cruel and horrific way, and their partners were taken from them. The strength and courage they have shown in campaigning on the issue has inspired me as their MP, so I am proud to be here to talk about their experiences and why they should be heard, instead of taking part in the debate on International Women’s Day. There are so many challenges when it comes to inequality and we must fight them all. What is happening with widowed parent’s allowance feels to me like one of the most basic examples of that and of the unintended consequences of the Minister’s and the Government’s thinking. In reading into the record some of my constituents’ experiences, I hope the Minister will think again about some of the choices the Government have made and the devastating consequences they are likely to have.

I will talk first about Ros. Her husband sadly died in 2014. He had been ill for some time before that, so Ros had given up work to support her children as their father deteriorated. That is an horrific experience for anyone to deal with at a young age. To then have to deal with the financial consequences only compounded her family’s grief. Ros suddenly became a single parent to two children and found that widowed parent’s allowance was, as she described it to me, a lifeline. The work that she did, in the theatre, was not easy to combine with being a full-time carer for her young children, and she was struggling with the grief of losing her husband.

Ros has done the calculations for what the Government’s proposed changes in the scheme would have meant for her and her family. The Minister claims that this is not about making money, but is a fair change in the system. When I look at the figures and how Ros is affected, I do not think that that is the case. I think this is clearly a cut in the budget designed to save the Government money, but it is a short-term saving with a long-term loss.

Ros and her family would, under the new scheme, have lost out on more than £100,000 over the lifetime of her children. That money allows her to look after her children, keep her family and household going, be a mother to two children who are grieving for their father and start to put her family’s life back together again. When she looks at what the new scheme would mean, she points out that the new lump sum would probably have been taken up by the funeral costs straight away. That is not a more welcome situation.

The pressure of not having a consistent income and worrying about what would happen after 18 months would have consumed her. As she says, after six months she was still drowning in paperwork relating to the death of her husband and trying to cope with the impact on her children. Grieving does not stop at 18 months, so why should the support that we offer to families affected by this sort of tragedy?

As Ros points out, these payments are a recognition of the contribution her husband made to the system when he was alive, through his national insurance payments. Indeed, as she points out, that creates quirks; a friend who has four children gets £50 less a week than Ros because her husband was 10 years younger. If we accept the principle that these payments are based on what the partner has paid into the system, surely what matters is whether those payments have been made and whether the partner was part of that relationship.

My right hon. Friend the Member for Birkenhead (Frank Field) supports terminating the support at 18 months. I disagree with him. I do not understand why 18 months is an appropriate cut-off date.

[Frank Field]

Will my hon. Friend give way?

[Stella Creasy]

I am happy to. I was about to say that I do agree with my right hon. Friend on some other things.

[Frank Field]

The Government’s original proposal was to stop the support after a year, and I thought 18 months was better than a year.

[Stella Creasy]

I understand that. I hope to make the case that we should support families who are in grief. We should not ask them to take on poverty and possible debt on top of dealing with grief, and we should not put a time limit on grief in these sorts of cases. We are not talking about hundreds of thousands of families, but we are talking about families facing one of the most horrific, soul-destroying experiences one can have. I agree with my right hon. Friend about the need to update the way in which our welfare system works.

The second case I want to talk about is, I hope, familiar, because I have written to the Minister before about this lady. Joanna has two beautiful young girls. I am lucky enough to see their pictures on Facebook and feel as if I am watching them grow up vicariously. One of her daughters was born, sadly, after her partner suddenly died. Joanna had to fight to get her partner’s name, David, on to the baby’s birth certificate because they were not married. They were clearly in a loving relationship. They had been together for a long period and had chosen not to be married. That should surely be their choice. The state should not use that to penalise Joanna and her family yet, as far as I can see, over the past couple of years we have penalised Joanna in many different ways. She had to pay £1,500 for a DNA test to prove that this gentleman was the father of her daughter and to have his name on the birth certificate. She does not receive a penny in widowed parent’s allowance, despite her partner paying into the system, just as Ros’s partner did. They are no less a family because they do not have a piece of paper.

In 2017, surely we should recognise those children’s need for the support that widowed parent’s allowance would provide to their family. That money would help not only to keep a roof above their head but to remove the pressure of debt, so that Joanna could be a mum to her two lovely daughters and start to put their lives back together following the sudden death of their father. It is those sorts of real issues and real people that our welfare system has to be able to work with. The cuts that the Government are making, particularly when it comes to widowed parent’s allowance, make no sense to me at all because they do not see the people behind these cases.

I have been lucky enough, through the organisation Widowed & Young, to see other examples that are similar to the stories of my two constituents, Ros and Joanna. Their cases are no less compelling. Will the Minister reconsider this 18-month bar and look again at the actual people behind the statistics by meeting them and hearing their stories, to understand the reality of being widowed at a young age and what impact that has on a family? Will the Minister ask again how we can do what we all want the welfare system to do—to support people and be a lifeline at a critical time, to help get these families back on their feet?

The changes that the Government are making, I fear, will not simply not help; they could actually make things worse for these families. They could bring debt, because the fear of what will happen will force people who are still grieving after a mere 18 months to make decisions that may be against the best interests of their family because they are short of cash.

As Ros said, this money has been a lifeline for her. She is one of the lucky ones because she qualified under the old scheme, but none of these people are lucky, because after all, they have lost a loved one. That is what we are trying to get at here. Ros, Joanna and all the women and men involved in this campaign deserve better from us. I hope that the Minister will at least commit today to meet them, to understand better the situation they will be in when these changes are introduced.

--- Later in debate ---

[Frank Field]

Sorry about that.

[Stella Creasy]

He is showing how the telephone system works.

[Richard Harrington]

Yes. Thank you, Mr Stringer. I was able to take a deep breath while the right hon. Member for Birkenhead attended to his electronic device.

Let me get back to the rising cost of funerals. We do not believe that the Government should be mandating or promoting a specific form of funeral provision for benefits claimants. Although my Department does not have responsibility for regulating the funeral industry, we are encouraging it to be more open and transparent in the way that I have explained, because people have to make informed decisions.

A number of low-cost alternative options are emerging in the funeral industry, such as direct cremations and municipal funeral arrangements offered by several local authorities. We recognise that those are not geographically widely available yet, and are not relevant to all religious and cultural practices. However, when it is appropriate, the industry should signpost people to direct cremations schemes and other low-cost alternatives so that bereaved people know they have the choice. We believe that improved pre-planning for funerals is just one way of helping individuals to focus on planning for a life event that is not always considered in advance.

Hon. Members, including the hon. Member for Wirral West, discussed the £700 limit. We know that some people need help with short-term needs, such as funeral expenses. Our priority has been to ensure that the scheme meets the full necessary costs of a cremation or burial for such people. The average payments have increased year on year to meet the necessary costs in full. Although we have had to make difficult choices about welfare spending, we have protected the £700 limit for other funeral costs, and we have continued to give people a choice on how they can spend that money on funeral expenses. However, the majority of funeral cost claims exceed the £700 limit, which is why, as I explained, we make interest-free social fund budgeting loans for funeral costs in addition to the funeral expenses payment.

The online eligibility checker was mentioned by the right hon. Member for Birkenhead—I think in his second question—and by other hon. Members. As I have explained, the dedicated bereavement service telephone line already offers an eligibility check and research shows that that has been well received by callers. We believe—I accept that hon. Members may feel differently—that an online checker could cause confusion. User research has identified that individuals would rather speak to an individual during these times—that is based on user research, not on cost. At these very difficult times—at one of the most traumatic times in their lives—they would rather speak to a well-trained human being than deal with a website.

We have been working closely with the bereavement service to ensure that the scripts and messaging are incorporated and updated for funeral expenses payments and to ensure that the staff can adequately offer support to a bereaved person or funeral provider when they access our services.

--- Later in debate ---

[Richard Harrington]

I was absolutely certain of it, as the right hon. Gentleman knows.

I confirm that we assign priority to applications received for children’s funerals and aim to process them without delay. We have listened to stakeholders’ concerns about the need to support bereaved parents of children, and we are currently considering how we can introduce a separate application form and system to help simplify the process in those tragic circumstances. We are keen to know how else to support individuals who require support for children’s funerals. The view of most funeral industry representatives at the round table that I mentioned was that the vast majority of funeral directors already waive fees or offer significant discounts for child funerals, although there are no industry-wide arrangements and there is no guidance in place. The National Association of Funeral Directors offered to do a survey of its members on current practice.

Moving on to bereavement support payments, I will respond to the points made by the right hon. Gentleman and others. As has been stated, both Houses of Parliament have approved, under the affirmative procedure, the Bereavement Support Payment Regulations 2017. The new bereavement support payment, which is due to be launched in April 2017, will replace three current bereavement benefits: the bereavement payment, bereavement allowance and widowed parent’s allowance.

Losing a spouse or civil partner is obviously tragic, and bereavement benefits provide vital support during this distressing time. Previous reforms have tended to be limited and made in response to specific pressures. No one had really considered how bereavement support fitted in with wider changes to the benefits system, and indeed to the social landscape as a whole. The aim is to provide targeted financial support at the time when it is needed most, without affecting access to additional forms of support that are available through other parts of the welfare system.

[Stella Creasy]

The Minister just said that the reforms are designed to provide targeted help when it is needed most. On what evidence has the concept of “most” been based, in his calculations? What does he define as a time when less help might be needed, as opposed to the most help? It would be helpful to understand the Government’s thinking.

[Richard Harrington]

The hon. Lady makes a good point. I used the word “most” to refer to the most critical short-term time, which is what I was discussing, but I am prepared to accept her point, without getting into a competition about when “most” is most. It is all the time, and I am happy to say that, but that is not the context that I was referring to.

I hope the hon. Lady will agree that the old system could be unfair and complex, and could act as a trap preventing people from readjusting. Reform is essential to simplify and modernise the system. The history of bereavement benefits is rooted in the Widows’, Orphans’ and Old Age Contributory Pensions Act 1925. The way that people thought in those days was that 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 to provide a replacement income for her to survive.

Today, women as well as men actively participate in the workforce, and many households now benefit from dual careers and dual incomes. That is why we are modernising bereavement support into a simple, uniform and easy-to-understand benefit that better reflects society. We listened to the recommendation of the Work and Pensions Committee that there was merit in considering the length of the new bereavement support payment. For that reason, the bereavement support payment is now payable over 18 months.

[Richard Harrington]

If the hon. Lady will be patient with me a little longer, I will mention the financial point that she has made. I am sure that she will intervene to castigate me if I do not.

The new bereavement support payment restores fairness to the system and focuses support during the 18-month period after a loved one dies, when people need it the most. I accept the view of the hon. Member for Walthamstow that “most” can mean a lot of things. If I said “when people need it” without “the most”, it would still mean the same thing. People need it in those 18 months. The support is not taxed and is subject to a disregard for income-related benefits. The idea is, hopefully, to help those on the lowest incomes. Those who are least well off will gain the most, as for the first time they will be able to receive payments of bereavement benefit in full alongside any other benefit entitlements.

In her case studies, the hon. Member for Walthamstow mentioned the duration of payment and interactions with universal credit. We do not believe that the period of payment could or should be equivalent to the period of grief following spousal bereavement. As I know from the experience of many people known to me, grief can go on for one’s whole life. The payment is not designed for that; it is designed to support people with the additional costs associated with bereavement, rather than providing an income replacement. That is probably the contradiction with the points that she made.

[Stella Creasy]

I thank the Minister for trying to clarify the Government’s thinking, but as he goes along, he is making rather a different case. He says that the changes needed to happen because women are now entering the workforce. The old system was taxed, so if he is concerned that women might have additional income, continuing the old system might deal with that challenge better.

The Minister talks as well about people needing it most, but surely he recognises that although the loss of a partner is emotionally difficult, the practical financial concerns are paramount here. Does he recognise that the picture that he is painting of the issues is slightly askew from the reality of what the issues are for these women?

[Richard Harrington]

Obviously I do not agree with the hon. Lady’s subjective point that I do not recognise the reality of the situation. We are not trying to replicate the period of grief with this benefit. As I have said, it is designed to support people with the additional cost associated with bereavement, rather than providing an income replacement. Her view, from what she has said, is that the support should be an alternative to the other income support systems.

[Stella Creasy]

Let me be absolutely clear: the support is predicated on the contributions that the partner will have paid into the national insurance system, just as they might get a pension from their partner. We are talking about fairness to the children so that they benefit from the contributions that their father made and about the impact on the family’s income. Actually, it is not about replacing income support; it is about the fact that the father has paid in a contribution that should be recognised to the children’s benefit.

[Richard Harrington]

What the hon. Lady talks about is not really what I am talking about, but I accept what she has said. I was actually talking about the bereavement support payment, which is a lump sum payment.

We believe that income-based benefits are more suited to providing longer-term assistance with everyday living costs. Unlike bereavement allowance and widowed parent’s allowance, bereavement support payment will be paid in addition to any other benefits the recipient is entitled to, thus ensuring that the least well off receive the extra cash in their pocket to help with those extra financial strains brought about by the unexpected loss of a spouse or civil partner of working age. Long-term ongoing income-related support will be provided through universal credit, which better targets support to those with the greatest need.

The regulations make no changes to conditionality, which has been mentioned. Like the bereavement benefits it replaces, the bereavement support payment sets no work-related conditions. Any obligation to participate in any work-related activity will come from claiming other benefits. That said, it is well known that long periods out of work can have a negative effect on an individual’s prospects of future employment. That is why the Government think it is important that people are encouraged to maintain, as much as they can, a link with the labour market.

Recipients of bereavement support payment who also receive universal credit will therefore be able to access Jobcentre Plus support on a voluntary basis from three months after bereavement. They will then not be subject to conditionality for a further three months. Those exemptions from conditionality will also apply after the death of a child or partner, even where there is no entitlement to the bereavement support payment. At the end of the six months, advisers will use their discretion to ensure individuals’ capability and requirements are taken into account. That is the best way of ensuring that the support we give is tailored to the individual.

The right hon. Member for Birkenhead and others mentioned the extension of the bereavement support payment to cohabitees. That was discussed in detail during the passage of the Pensions Act 2014. Marriage and civil partnerships are legal arrangements 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 could be a lengthy, complex process, which could cause distress at a time of bereavement.

Many critics have suggested that it is unfair that those who choose not to formalise their relationship are treated as a couple for income-related benefits, but not for contributory benefits. Income-related benefits serve a different purpose, however: they are for 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, whatever the legal status of their relationship, have joint outgoings and share resources such as earnings or other income.

The position with bereavement benefits is different, because they are contributory. The founding principle of the contributory benefit system is that all rights to inheritable benefits derive from another person’s contributions. That is based on the concept of legal marriage, which has extended to civil partnership in recent times. Unmarried or non-civil partnership couples will, of course, have access to a full range of income-related benefits and will benefit from the removal of conditionality requirements in exactly the same way as those in a legal marriage or civil partnership.

[Stella Creasy]

Will the Minister give way?

[Richard Harrington]

I am not trying to suppress the hon. Lady’s comments, but I was about to explain about widowed parents under the new system, which, if I may boldly suggest it, was probably what she was going to ask me about.

[Stella Creasy]

I was simply going to ask whether the Minister will clarify whether he considers children to be a joint outgoing. If he does, the contributions that a partner would make to a household would also be eligible. The idea that if people are not married, their relationship to those joint outgoings somehow stops at their death seems rather misplaced, does it not? I have certainly heard that children are expensive.

[Richard Harrington]

I can personally verify the latter part of the hon. Lady’s comments on the expense.

The new bereavement support payment restores fairness to the system and focuses support just on that 18-month period after a loved one dies, when it is most needed. It is not taxed and will be subject to a disregard for income-related benefits, helping those on the lowest incomes the most. Widowed parents will no longer lose their benefits if they decide to remarry or repartner. We do not believe that the period of payment could or should be equivalent to the recovery period following spousal bereavement. I am sure most people would agree that that is a totally different amount of time.

Unlike with the widowed parent’s allowance, claimants of the bereavement support payment will be entitled to receive all the other benefits at the same time. Disregarding bereavement support payment in the calculation of other benefits will ensure that the immediate additional costs of bereavement are met. Those requiring support will be able to obtain it from other areas of the welfare system, and I cannot stress that enough. Its purpose is better placed to provide longer-term, means-tested financial assistance.

The right hon. Member for Birkenhead, the hon. Member for Walthamstow and other Members made a reasonably cynical, but well-made point about the changes to the bereavement benefit. They basically said that it was just an austerity measure, delivering savings of £100 million to the Treasury after two years. Over the first two years of the reform, we will actually spend an additional £45 million, but any savings, like in anything else in the public finances, will be for future Governments to reinvest as they choose. I therefore cannot undertake, as I have been asked, to ensure that savings are reinvested in this field.

It is important to emphasise for the record 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 to lose from the changes. That is particularly so for the least well off, because—I have made this point several times—bereavement support will be paid on top of any income-related benefits that the household receives.

The Government have been asked here and elsewhere to extend the duration to three years and make the BSP cost-neutral. If we did that, we would have to fund it by reducing other elements of the payments. There seems to be little rationale for reducing the monthly payments for parents to make extending the duration cost-neutral. It would reduce payments to a token amount, which would not meet the intention of dealing with the immediate costs relating to bereavement.

With the introduction of the bereavement support payment, short-term financial support will be provided based on six months of national insurance contributions. The amount and duration of the award will be clear from the outset, allowing people time to plan ahead. Those requiring further support will be able to obtain it from other areas of the welfare system that are better placed to provide longer-term, means-tested financial assistance.

The hon. Member for North Ayrshire and Arran made a point on uprating. Any decisions on future changes will be taken as part of the annual process in the context of the wider public finances. I cannot say much more on that, other than that section 150 of the Social Security Administration Act 1992 provides for the rate of BSP to be reviewed annually. The Government committed to review the bereavement support payment reform in the impact assessment of 2013, but we cannot do that until sufficient evidence is available to assess all aspects of the policy, including its effectiveness and the impact on different groups of claimants.

The hon. Lady also made a point about the consequences for children of bereavement support payments. She said that, as a result of the shorter duration of payments, 75% of new claimants with children will be worse off. No one in receipt of the current bereavement benefits stands to lose out as a result of these reforms. As I said, recipients of the current benefits will continue to receive them for the natural lifetime of their award. Furthermore, for those households where there are dependent children, a higher level of payments will be made in recognition of that fact.

In conclusion, let me reassure hon. Members that the Government are absolutely committed to supporting the bereaved and ensuring that individuals have the opportunity to access the funeral expenses payment scheme. Our priorities remain to improve the funeral expenses scheme, to raise awareness of the scheme and to ensure that we are doing what we can to offer a provision of support for vulnerable claimants.