1.The Government welcomes the Select Committee’s report and its support for the forthcoming reforms to bereavement benefits. It is encouraged by the recognition that the cost of funerals is not just an issue for Government and those providers of funeral services including the church, funeral directors, local authorities and owners of crematoria all have a role to play.
2.The Government believes, and the Select Committee acknowledges, it should not take responsibility for meeting the full cost of funeral arrangements when there is a family that can take part of that responsibility. Additionally, as the Select Committee agrees, it is important that, where possible, individuals take responsibility for their end of life planning and do not leave their family or taxpayers with the financial burden of meeting their funeral costs.
3.The Government agrees with the Select Committee’s comments that whether it is help with the one-off costs of a funeral or on-going financial help, those who have been bereaved need easy to access and straightforward information on the support available to them. Unfortunately because benefit eligibility is not straightforward, it is not possible to give a definitive instant guide to confirm benefits will be received.
4.The Government accepts that there is more that could be done to promote the support available at the point people become bereaved and continually looks to improve its service. The dialogue Government began in 2015 with stakeholders, including funeral directors, representatives from life assurance companies, academics and advice services will ensure better information on eligibility and award amounts will become available. This work is advancing.
5.The Government is committed to providing the most effective support possible by taking a holistic approach to addressing the issues, particularly around communication and guidance, faced by the bereaved.
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.
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.
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.
6.The Government’s priority is to deliver its core services in the most suitable way and at the right cost to enhance the service to claimants. It also aims to work with partners including local government and the private sector so that they deliver better and cost-effective services to the public, particularly at a time of emotional upheaval.
7.The Department for Work and Pensions is already meeting with both the National Association of Funeral Directors and The National Society of Allied & Independent Funeral Directors to discuss how they might be more transparent in making consumers aware of their choices. These discussions are also considering how Government can make consumers more aware of the choices available when it comes to making funeral arrangements.
8.Beyond this, the Government believes prescribing what a claimant should expect as part of a funeral may not lead to the Select Committee’s desired outcome. Anecdotal evidence, as the Select Committee acknowledges, suggests more people are seeking alternatives to what is sometimes referred to as a ‘traditional’ or ‘simple’ funeral. The Government would not want to interfere with an individual’s choices on their funeral or burial arrangements. A one-size funeral fits all approach would not be appropriate. We are working with stakeholders to try to agree what elements might constitute a standard package and what a reasonable cost might be.
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;
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.
9.The Government is committed to making it is easier to understand who can claim a Social Fund Funeral Expenses Payment and how much a successful applicant can expect to receive. Currently the dedicated Department for Work and Pensions Bereavement Service telephony line already offers an eligibility check for bereaved people for Social Fund Funeral Expenses Payment.
10.The Department for Work and Pensions has also considered the merits of an online eligibility checker for Social Fund Funeral Expenses Payments. Rather than having the outcomes the Select Committee anticipates an online checker may inadvertently cause additional confusion to bereaved people. Interested applicants would go through a potentially time consuming process answering questions which would ultimately end with advice to either call the Department for Work and Pensions Bereavement Service to see if they can make a claim or to print and complete a paper form. In either case they would have to repeat much of the information they have just entered into the checker.
11.The Department is therefore investigating if other, more appropriate, solutions would better address the underlying problem of people not understanding their eligibility. The Department will be developing proposals for what these may be and will test them with users. This will also encompass what channels should be available and how to present the often complex information in as easy to understand way as possible.
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.
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.
12.The Government is committed to improving the information on who is eligible to apply for a Social Fund Funeral Expenses Payment and what the scheme will and will not pay for. The Department for Work and Pensions reviews its forms on a regular basis and for the SF200 claim form has sought views from those using the form as well as funeral directors and those offering advice in this area. The Government will consider this recommendation as part of that work.
13.The Government will also look at how it can provide this information more clearly in other advice which the Department for Work and Pensions makes available relating to Social Fund Funeral Expenses Payments as part of the more holistic review of all the information we provide to bereaved people.
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.
14.The Government recognises through research already conducted that this is a very challenging time for bereaved people which dramatically impacts on how they are able to interact with government at a local and national level and how they process information. As a result we are committed to improving how we best provide information and advice, including which channels will be most effective and how we can attempt to tailor this to individual circumstances.
15.The Department for Work and Pensions is considering the range of services a bereaved person may use before arranging a funeral and how we might make more and better use of these. We are already looking at the way bereaved people interact with it to notify a death, manage changes to existing benefits and apply for benefits they may now be entitled to. We are considering this in a holistic way to ensure we look at it from the perspective of the bereaved person. This work includes Social Fund Funeral Expenses Payments and is also considering the full range of information available to bereaved people via GOV.UK and through third parties such as registrars and funeral directors.
16.As part of this work the Department for Work and Pensions is carrying out its own direct user research with bereaved people to understand their experience and where they found out, or where they did not, what they needed to do following the death. The Department for Work and Pensions is also interviewing third parties who work in this system including registrars, funeral directors and support organisations. This will ensure we improve how Government engages with the bereaved to ensure that information is in the right place and form.
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.
17.The Government will consider this recommendation in the context of the discussions we are already having with funeral directors, their representative organisations, the Local Government Association and others from the sector.
18.The Government has noted the work of the Scottish Government and are also speaking with them about their mitigation for possible unintended consequences of their approach, such as the industry passing on costs to other ‘better off’ consumers and smaller companies being driven out of business.
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.
19.The Government maintains that a key principle of the National Insurance system is that all rights to benefits derived from another person’s contributions are based on the concept of legal marriage or civil partnership. A husband, wife or civil partner pays National Insurance contributions to ensure, among other things, that if they die prematurely, their surviving spouse or civil partner will be entitled to benefits based on these contributions.
20.Proving cohabitation is a lengthy complex process which would be distressing, especially to the recently bereaved. It is not a straightforward concept and can be open to interpretation leading to delays and additional requirements for claimants.
21.Additionally, there would be the potential for multiple claims, for example one from the legal spouse and another from a cohabiting partner.
22.The Government previously made reference to this position in the bereavement benefits consultation, stating unambiguously that the question of allowing bereavement benefits for cohabiting couples was out of scope.
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.
23.The Government is sympathetic to the sensitivities around the cessation of Bereavement Support Payment coinciding with the anniversary of the death.
24.We will consider the impacts of amending the payment duration as part of the implementation of this new benefit.
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.
25.Universal Credit is a fundamental reform which replaces six separate benefits. There are substantial benefits to this. Universal Credit simplifies the system and sweeps away the complexities, traps and confusions of the previous system. It mirrors the world of work and gives people control over their own finances. Universal Credit also extends child care support to claimants working less than 16 hours a week, which may help widowed parents.
26.As part of these reforms, the treatment of unearned income has been made consistent, coherent and simpler across the welfare system. Regulations list unearned income, which will be taken into account in the Universal Credit assessment; and all other unearned income is fully disregarded. This is markedly simpler than the benefits which Universal Credit replaces.
27.Universal Credit provides support for every day living expenses and takes into account unearned income which meets that same need. As Widowed Parent’s Allowance provides support for normal living expenses it would not be appropriate to disregard it as a source of unearned income.
28.However, we are committed to ensuring that no-one already on existing benefits whose circumstances remain the same will lose out in cash terms as a direct result of being moved on to Universal Credit. These claimants will be given transitional protection to avoid cash loss at the point of change.
20 June 2016