Funeral Payments
12. Funeral payments are available to people receiving
an income-related benefit, Working Families Tax Credit or Disabled
Persons Tax Credit. They are intended to cover necessary burial
or cremation charges and up to £600 of other funeral expenses.
Payments are reduced if a claimant has savings over £500
(£1000 if aged 60 or over), or certain other sums such as
money from a pre-paid funeral plan. To get a payment, a person
must qualify as an eligible person, under strictly defined rules.
In 1999-2000, there were 44,000 funeral payment awards, averaging
£866 each. 26,000 were refused. The total spent on Funeral
Payments has reduced from £47m in 1995/96 to £37m in
1999/2000.
13. Many witnesses drew our attention to the restrictions
on who may claim and the maximum amount available for successful
applicants. The Local Government Association considered that:
"The complicated rules on 'absent partners' and 'close relatives'
amount to an inflexible and insensitive set of exclusions which
produce trauma, despair and practical difficulties."[7]
Mr Patterson of the Local Government Association (LGA) said: "either
people are refused, or [receive] limited amounts. The average
Social Fund funeral payment is about £866. The average cost
of a funeral in the UK, the last figure I saw, was £1,600."[8]
The London Borough of Newham said that: "The level of £600
for funeral directors' costs for the Funeral Payment causes hardship
and distress. Local funeral directors have described how they
find it very difficult to offer dignified funerals to claimants
at this level of the Funeral Payment."[9]
Mr Bateman, representing the LGA, thought that: "it ought
to be possible to devise a model, 'value for money', 'funeral
with dignity' scheme, where we do not get into that type of degrading
behaviour."[10]
Mr Wheatley of the National Association of Citizens Advice Bureaux
(NACAB) was of the opinion that:
"The amounts paid out could be higher and the
rules could be less restrictive. We would back up what others
have said, that successive restrictions have produced cruel and
absurd decisions, and the typical outcome, even if people do get
a grant, is that it only pays half the cost of the funeral. It
can be very distressing, people are left with enormous shortfalls
to find, if they can, from charitable sources, others are left
with debts and are visited by bailiffs."[11]
In their written evidence the London Advice Services
Alliance (Lasa) agreed:
"By definition funeral payments are intended
for the very poorest in society, as neither the deceased nor the
bereaved have adequate savings or assets. There is no justification
for not funding the standard cost at least. Many bereaved people
get into serious debt as a result."[12]
14. There is consistent evidence from claimants that
they perceive the process as unfeeling and overly-bureaucratic.
For example Citizens Advice Scotland told us of:
"a woman on Income Support whose mother
had recently died. Her father, who was aged 90 and registered
blind, was rendered incapable of doing or signing anything due
to the shock of his wife's death. The client therefore filled
in the form for him and signed as his appointee. The claim was
turned down as she had not filled in form AP1, necessary in such
circumstances. Her father died before arrangements could be made
for this form to be signed. The bureau states that pleas to the
Benefits Agency to consider the circumstances in which the claim
was made were ignored."[13]
15. We also heard that the rules were restrictive
in the case of people from ethnic minority backgrounds. Mr Patterson
of the LGA told us that: "they cannot get even the costs
of religious observance in this country, because the final funeral
will take place, say, in Pakistan, and they certainly do not get
equal treatment."[14]
16. We tackled the Minister on the question of Funeral
Payments. While she agreed that: "The funeral payments end
of the Social Fund is one of the most difficult"[15]
and suggested that "The £600 is kept under review",[16]
she accepted that the amount of Funeral payment had last been
increased in April 1997.[17]
17. Whilst we accept that there have been many
changes to the Benefit system since 1997 which have taken priority,
we believe that reform of Funeral Payments is long overdue and
recommend that the Government increases the amount available to
claimants for Funeral Payments to a more realistic total, reflecting
the current charges for a funeral and that steps should be taken
to ensure that the amount is reviewed annually to reflect increases
in funeral costs.
18. We recommend that there should be greater
flexibility in the rules governing eligibility for funeral payments,
so that payments can be, for example, made to the parent of a
deceased child, or to a close relative or close friend if it is
reasonable to do so. The question of reasonableness should be
decided at the discretion of the decision-maker, subject to guidance
(as opposed to inflexible rules laid down in regulations as now);
and with a right of appeal to a social security appeal tribunal
on the exercise of that discretion.
19. In the case of applications from people who
wish to bury the remains of the deceased overseas, we recommend
that funeral payments (subject to the usual maxima applied to
other funerals for which a Funeral Payment is available) should
be allowed in respect of funeral costs (or equivalent religious
observance) which are incurred in the UK, prior to transportation
overseas.
Winter Fuel Payments
20. Included in the Regulated Social Fund, Winter
Fuel payments, of £200, are paid to all households where
there is someone aged 60 or over. The annual cost of this benefit
in the current year[18]
is £1.7bn. Some questions have been raised as to whether
the benefit should be more targeted or extended to those receiving
Income Support or other income related benefits. The Social Inclusion,
Housing & Voluntary Sector Committee of the Scottish Parliament
asked whether we would take up this issue.
21. In response to our questioning, the Minister
stated that: "to extend winter fuel payments to those who
currently effectively get cold weather payments, that is the disabled
and those with children under 5 ... will cost an extra £300
million a year"[19]
and that the benefits paid to disabled people and those on income-related
benefits included an element towards additional heating costs.[20]
She considered that; "the government is not contemplating
doing it."[21]
22. We do not believe that the current universal
Winter Fuel payments are likely to be extended at the present
time. If, however the arrangements are changed in the future
to a more targeted benefit we will expect the fuel poor in other
groups to be included. The element of benefits which is intended
to cover fuel costs, to which the Minister referred in her evidence
to the Committee, should keep pace with any increase in the cost
of heating generally.
The Discretionary Social Fund
23. Most of the evidence we received during our inquiry
concerned the Discretionary Social Fund which consists of three
elements: Community Care Grant (CCG); Budgeting Loans, repayable
by the claimant from weekly benefit to meet expenses which occur
irregularly; and discretionary Crisis Loans for emergencies, similarly
repayable from weekly benefit. The administration of the Discretionary
Fund remained substantially unchanged from 1988 until April 1999,
when a more computerised, mechanistic approach to awarding Budgeting
Loans was introduced.
Expenditure
24. Table 1 below shows expenditure on the Discretionary
Social Fund since 1994. In the case of Budgeting Loans and Crisis
Loans, the difference between gross and net expenditure is accounted
for by loan repayments. The table shows that expenditure on Community
Care Grants grew by only 3% between 1994-95 and 2000-01. Gross
expenditure on loans rose by over 80% during the same period.
Net expenditure on the Discretionary Social Fund was less in 1999-2000
than in 1994-95.
Table 1: Discretionary Social Fund Expenditure
(£m)[22]
