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Select committee inquiry

Bereavement benefits inquiry

Closed

Work and Pensions Committee · Opened 21 October 2015 · Closed 22 June 2016

11 recommendations · 4 conclusions
Inquiry on parliament.uk ↗

What the inquiry looked at

“Government Response Support for the bereaved: Government Response to the Committee’s Ninth Report of Session 2015–16 Support for the bereaved: Government Response to the Committee’s Ninth Report of Session 2015–16 (PDF 156KB) Report Support for the bereaved Support for the bereaved (PDF 835.40KB) The Work and Pensions Committee invites written submissions on the policies and processes which relate to the Social Funeral Fund Payment, Bereavement Payment, Bereavement Allowance and Widowed Parents Allowance and recommendations for improvement. Terms of reference: Bereavement benefits”

The committee's words, from the inquiry page on parliament.uk ↗.

What it found

In the committee's words, from the summary of 9th Report - Support for the bereaved ↗

Bereavement is a difficult and distressing experience, and for many it comes with significant financial pressures. The Department for Work and Pensions administers two different benefits to support bereaved people; Social Fund funeral payments (SFFPs)

and bereavement benefits.

Social Fund funeral payments

SFFPs are means-tested and claimants must meet eligibility criteria in order to receive a payment. The scheme pays for the purchase of a grave and burial fees, or a crematorium fee and any medical fees necessary for a cremation to take place. The amount awarded to meet these fees is uncapped. The scheme also pays up to £700 towards other costs associated with a funeral, such as a coffin, a hearse, funeral director fees and flowers.

The maximum award for other essential funeral costs has been fixed at £700 since 2003.

It now does not cover the cost of a simple funeral. In addition, funeral director fees have risen well above the rate of inflation. One of our primary recommendations is that DWP negotiates and agrees the reasonable cost of a simple funeral with the relevant industry bodies. The maximum SFFP should then be changed to reflect this cost, if need be.

Bereaved people are vulnerable and they may not always be well-served by the market.

It is clear that any improvement to SFFPs must address the range of factors driving up funeral director fees and we have passed relevant evidence from our inquiry to the Competition and Markets Authority. We may return to the issue of funeral director fees in future.

An eligibility checker should be introduced so that claimants can see whether they are potentially eligible for an SFFP and how much they could receive. The checker should also be used to communicate key pieces of information to claimants. The Department should make leaflets available in places that could offer independent advice about arranging a funeral, such as hospices and registry offices.

Following the lead of the Scottish Government, the UK Government should conduct a cross-Departmental review of burials, cremations and funerals. This coordinated review should look to make recommendations that have a long-term impact on funeral inflation and work to reduce funeral poverty.

Bereavement benefits

The current system of bereavement benefits is made up of three payments; a one-off Bereavement Payment; a Bereavement Allowance; and a Widowed Parent’s Allowance.

All of these benefits are based on the deceased’s National Insurance contributions.

The Government proposes to replace this system with one benefit, the Bereavement Support Payment (BSP), from April 2017. We broadly welcome the Government’s proposed reforms.

What the government said

The government responded on 22 June 2016.

Summary written by Accountability Index from the government's response.

The Government welcomes the Committee's report and its support for the forthcoming bereavement benefit reforms, while declining or only agreeing to consider several specific recommendations.

  • On information for the bereaved, the Government agrees that people need "easy to access and straightforward information" and accepts "there is more that could be done to promote the support available"; stakeholder work "is advancing".
  • On an online eligibility checker, it believes this "may inadvertently cause additional confusion" and is instead investigating other solutions, developing proposals to test with users. No date is given.
  • On the Committee's recommendation to prescribe a simple funeral, it believes this "may not lead to the Select Committee's desired outcome", but is working with stakeholders to try to agree what a standard package and reasonable cost might be.
  • On extending Bereavement Support Payment to cohabitees, the Government "maintains" that benefit rights are based on legal marriage or civil partnership. On payment duration, it "will consider" amending it as part of implementation.

Read the government's response ↗ Read the report ↗ Report an error

How the inquiry ran

Each dot is a dated item listed on this page, from the inquiry's opening on 21 October 2015 to its close on 22 June 2016.

  1. Oral evidence 3 sessions
  2. Report 31 Mar 2016
  3. Government response 22 Jun 2016
  4. Correspondence 24 May 2016

What it recommended 11 recommendations · 4 conclusions

1The original Funeral Expenses Regulations made provision for a simple funeral service for those otherwise...
Concluded (the committee's words)
The original Funeral Expenses Regulations made provision for a simple funeral service for those otherwise unable to afford one. The removal of any listed items in the Regulations, and the freezing of the £700 cap for the last 13 years, has devalued the SFFP to the point where it does not cover a simple funeral.
2We recommend the Government negotiate a reasonable cost of, and items required for, a simple...
Recommended (the committee's words)
We recommend the Government negotiate a reasonable cost of, and items required for, a simple funeral with the National Association of Funeral Directors and The National Society of Allied & Independent Funeral Directors. Those funeral homes that agree to offer such a funeral should be signposted in Government communications and public services for the bereaved. Furthermore, these funeral homes should be accredited as part of a fair funeral scheme.
3We recommend the Funeral Expenses Regulations be amended to set out the essential items for...
Recommended (the committee's words)
We recommend the Funeral Expenses Regulations be amended to set out the essential items for a simple funeral. This should include items such as the collection and care of the deceased and a coffin. The capped element of the payment should reflect the cost of a simple funeral, as negotiated with industry bodies. The capped element should then be index-linked.
4We are concerned by the lack of protection in the market for bereaved customers, particularly...
Concluded (the committee's words)
We are concerned by the lack of protection in the market for bereaved customers, particularly those on low incomes. They are vulnerable and may not be inclined to shop around. This is not conducive to effective operation of the market. We did not set out to evaluate the funeral director market and a detailed analysis is beyond the scope of this inquiry. It is clear however, that any improvement to SFFPs must address the combination of factors driving up funeral director fees. We have passed relevant evidence from our inquiry to the Competition and Markets Authority for review.
5We recommend that DWP introduce an eligibility checker for SFFPs that gives claimants three key...
Recommended (the committee's words)
We recommend that DWP introduce an eligibility checker for SFFPs that gives claimants three key pieces of information: whether they are eligible; how much they could receive; and options for approved local funeral directors and their fees. An eligibility checker would put claimants in a stronger position when arranging a funeral, make the complex nature of the payment clearer and help claimants make an informed choice about which funeral director they use. The eligibility checker should do the following: • It should be made explicit at the start of the eligibility check that if there is a close relative of the deceased who is not on qualifying benefits the claimant may not be eligible for an award. The definition of a ‘close relative’ should also be stated;. Support for the bereaved 41 • Eligibility should then be determined through a series of questions. It should be made clear that the calculator only informs the claimant whether they are likely to be eligible, so as not to be misleading. • The calculator should give an indicative amount of how much the claimant could receive. Using information on local authority charges for burial and cremations in the claimant’s area, the calculator could provide a relatively accurate amount for this element of the SFFP. • Based on information provided by the claimant, the calculator should tell the claimant how much they could receive in addition to the burial or cremation cost. • It should be made clear to the claimant that, whilst the burial and cremation element of the payment is uncapped, this does not necessarily mean that whatever they paid will be matched. This is the case even if a higher burial cost is for religious reasons. • Finally, the calculator should list funeral directors local to the claimant, their fees for a simple funeral and what the funeral would include. This would allow the claimant to make an immediate comparison between potential state support and funeral costs in their area. This function could be similar to that offered by the website yourfuneralchoice.com but should only signpost to companies that have agreed to offer a fair low-cost funeral.
6We agree with the principle that individuals should look to make financial provision for their...
Recommended (the committee's words)
We agree with the principle that individuals should look to make financial provision for their own funeral, wherever this is at all possible. Where this has not happened it is right that family or friends should make provision. The state should be the last resort. We recommend that the SF200 claim form be amended to make it clear to claimants that the DWP will not make an award where another close relative could pay for the funeral. As far as possible the form should be shortened and simplified and DWP should consider including ‘don’t know’ response boxes.
7We recommend that the Department review whether the bar for assessing other relatives’ relationship with...
Recommended (the committee's words)
We recommend that the Department review whether the bar for assessing other relatives’ relationship with the deceased is set at the right level. The current requirement may be inadvertently excluding some claimants who should receive an award and lowering the bar may help to bring down application processing time.
8We recommend that leaflets on funerals should be made available in hospices and registry offices,...
Recommended (the committee's words)
We recommend that leaflets on funerals should be made available in hospices and registry offices, and discreetly available in hospitals. They should include information on applying for SFFPs and using the Tell Us Once service and Bereavement Service. They should also direct people to approved funeral directors and give information about both fees and local charges for burials and cremations.
9We recommend that the UK Government follows the approach of the Scottish Government and acts...
Recommended (the committee's words)
We recommend that the UK Government follows the approach of the Scottish Government and acts to tackle the systemic causes of funeral inflation. The Government should conduct a cross-Departmental review of burials, cremations and funerals. This coordinated review should look to make recommendations that have a long-term impact on funeral inflation and work to reduce funeral poverty.
10We broadly welcome the Government’s proposed reforms to bereavement benefits.
Concluded (the committee's words)
We broadly welcome the Government’s proposed reforms to bereavement benefits. Many of the changes are overdue. There are three areas, however, that merit further consideration by the Government: the treatment of bereaved cohabitees with children, the length of the new BSP and interactions with Universal Credit.
11Bereaved parents face increased expenses because of their responsibility to their children.
Concluded (the committee's words)
Bereaved parents face increased expenses because of their responsibility to their children. The needs of bereaved children of cohabiting parents are no different to those whose parents were married or in a civil partnership. Penalising children on the grounds of the marital status of their parents is unjust.
12The cost of extending the Bereavement Support Payment to cohabitees with dependent children is low,...
Recommended (the committee's words)
The cost of extending the Bereavement Support Payment to cohabitees with dependent children is low, relative to the overall cost of the system. The reforms are also projected to deliver a medium-term saving to the Department, and the cost to HMRC is uncertain. The reform was not designed to save money, but savings are predicted to increase. Following a recent case in Northern Ireland, the DWP may be forced to reverse its position and we urge the Department to take positive action now rather than wait for a challenge in the courts. We recommend that the Bereavement Support Payment be extended to cohabiting couples with dependent children, using medium-term savings from the bereavement benefits reform.
13The financial impact of bereavement can, and often will, last much longer than one year...
Recommended (the committee's words)
The financial impact of bereavement can, and often will, last much longer than one year or 18 months. Stopping after a year is particularly problematic however, as it is the anniversary of the death. We are also unconvinced by the argument that a longer period of monthly payments would be administratively more complex and expensive. We recommend that the Department adopt a cost-neutral method of extending the BSP to 18 months through a reduction in the lump-sum payment. The Department should consider extending the monthly payments further, as part of its forthcoming review.
14It is wholly unsatisfactory that the poorest WPA claimants are set to suffer a net...
Recommended (the committee's words)
It is wholly unsatisfactory that the poorest WPA claimants are set to suffer a net loss under Universal Credit. This problem has been described as a technicality and we can only assume it was unanticipated. The Department’s solution is unworkable and unnecessarily complicated, and it does nothing to retain the value of WPA for the poorest claimants. The logical solution is to exempt them. We recommend that WPA be removed from the list of benefits treated as ‘income other than earnings’ for the purposes of Universal Credit. We recommend that WPA be removed from the list of benefits treated as ‘income other than earnings’ for the purposes of Universal Credit.
15The success of Universal Credit rests heavily on the ability of Work Coaches to assess...
Recommended (the committee's words)
The success of Universal Credit rests heavily on the ability of Work Coaches to assess the individual circumstances of a claimant and bereavement is yet another area in which they will need to exercise judgement. The Government should reflect on whether this additional burden to Work Coaches is the right approach and we will consider their role in more detail in our inquiry into the future of Jobcentre Plus.

Evidence

Oral evidence sessions 3

Correspondence 1 letter