Bereavement benefits - a remedy?

Frances Ryan looks at rules providing new entitlement to bereavement benefits for surviving partners of a ‘cohabiting’ relationship.

Following the two court cases1McLaughlin, Re Judicial Review (Northern Ireland) [2018] UKSC 48; Jackson and others v SSWP [2020] EWHC 183 which successfully challenged the legality of excluding cohabiting partners with children from claiming bereavement benefits, on 9 February 2023 the Bereavement Benefits (Remedial) Order 2023 No.134 (the ‘Remedial Order’) was finally introduced to allow cohabiting partners with children or who were pregnant when their partner died, to claim higher rate bereavement support payment (BSP) and widowed parent’s allowance.

Partners who were living with the deceased at the time of their death but were unmarried and not in a civil partnership (and so were ‘cohabiting’), and who satisfied the entitlement conditions on or after 30 August 2018, can now claim bereavement benefits. For deaths before 6 April 2017, it will be widowed parent’s allowance; for deaths after this date it will be BSP. Why 30 August 2018? This was the date the Supreme Court decided in McLaughlin (Northern Ireland) [2018] UKSC 48 that the exclusion of cohabiting partners was incompatible with the European Convention on Human Rights. Attempts to get entitlement to start earlier, and for an ex gratia scheme for those who had ceased to meet the entitlement conditions by 30 August 2018, have been rejected.

The couple must have been ‘living together as if they were married’2s30(6B) Pensions Act 2014; s39A(7) Social Security Contributions and Benefits Act 1992 (‘SSCBA 1992’) at the time of the partner’s death – there is no minimum amount of time they must have been cohabiting.3House of Commons, Hansard, col 4, 24 January 2023 The deceased must have satisfied the national insurance contribution conditions or, for BSP only, been an employed earner and died as a result of an industrial injury or disease (the rules on this have not changed for widowed parent’s allowance). Bereavement benefits cannot be paid to pensioners, but if the partner was under pension age on or after 30 August 2018 but has since turned 66, they can get a backdated payment for the period until turning 66. The surviving partner must also be entitled to child benefit.

The entitlement for survivors of a cohabiting couple is for the higher rate. The amount of arrears paid varies depending on when the partner died and when a claim is made. If they died between 30 August 2018 and 8 February 2023 and the partner met the conditions on or after 30 August 2018, the claim can be backdated to when they first became entitled, as long as the claim is made in time.4Reg 3(2) Bereavement Support Payment Regulations 2017 No.410 (‘BSP Regs’); DWP guidance, 2-23: The Bereavement Benefits (Remedial) Order 2023 – widowed parent’s allowance and higher rate bereavement support payment (‘DWP guidance 2-23’), February 2023, para 16 The maximum amount is £9,800, comprising 18 monthly payments of £350 plus the £3,500 initial lump-sum payment. The partner must claim by 8 February 2024 to get the full amount and the lump sum, but because BSP can be backdated three months, a claim can be made up to 21 months after 9 February 2023 – by 8 November 2024 at the latest. The amount paid will be reduced and they will not get the lump sum.

It is more complicated if the partner died between 6 April 2017 and 29 August 2018. If the partner claims by 8 February 2024, the number of months paid is 18 months minus the number of months between the day after the partner’s death and 29 August 2018.5Reg 2(7)-(9) BSP Regs; DWP guidance 2-23, para 18 For example, if the partner died on 14 August 2017, there are 12 monthly anniversaries of the partner’s death from the day after they died to 29 August 2018. Eighteen minus 12 gives six months of BSP. For claims made after 8 February 2024 but by 8 November 2024, the amount paid is either calculated as above, or it is paid for 21 months minus the number of months between 9 February 2023 and the date of claim, if this period is shorter.6Reg 2(7)-(9) BSP Regs; DWP guidance 2-23, para 19

Whether the partner died before or after 30 August 2018, the period of entitlement is artificially shifted forward. Entitlement starts on either 9 February 2023 if a claim is made within a year, or otherwise three months before the date of claim.7Reg 2(5) and (8) BSP Regs If the partner dies on or after 9 February 2023 or the conditions are met only after that date, the usual rules apply.

For widowed parent’s allowance, the partner will have died many years ago, but if the surviving partner met the entitlement conditions between 30 August 2018 and 9 February 2023 and they claim by 8 February 2024, they are paid the full amount from when they were first entitled.8Art 3(1) and (2) Bereavement Benefits (Remedial) Order 2023 No.134 (‘BB(R)O’) Entitlement cannot start before 30 August 2018. Payments continue for as long as the partner meets the conditions; entitlement ends if they stop getting child benefit or marry/start cohabiting with a new partner. If they miss the February 2024 deadline, they can still claim but their claim is not fully backdated. Rather than getting a maximum of about five and a half years arrears,9Letter from Viscount Younger of Leckie to Baroness Sherlock, 2 February 2023, available at depositedpapers.parliament.uk/depositedpaper/2284993/files they just get three months – so for maximum arrears, it is really important that partners claim by 8 February 2024.

There will be situations where more than one person may want to claim – usually where the deceased left a cohabiting partner and a spouse, both of whom had children. The general rule is that only one person can get a bereavement benefit for each death; it is the person who was living with the deceased when they died who is entitled.10s30(1A) and (1C) Pensions Act 2014; s39A(3A) and (3C) SSCBA 1992 In the previous example, the partner is entitled because they were living with the deceased when they died. If a partner claims a bereavement benefit but it was already in payment to a spouse, if the partner was living with the deceased when they died, they have priority and the spouse is no longer entitled. There is no run-on where competing claims are made. The DWP has not said how or when it will notify the first claimant, other than to say that benefit already paid to the spouse will not be recovered.11House of Commons, Hansard, col 14, 24 January 2023 Regardless, the DWP must first revise the decision in the usual way.

So that surviving spouses are not disadvantaged by the Remedial Order, there is transitional protection for those who were either getting bereavement benefits on 9 February 2023 or met the entitlement conditions before that date.12Art 2 BB(R)O It allows both a spouse to either continue getting the benefit or make a new claim and a cohabiting partner to claim. Benefit can then be paid to both for as long as they are entitled. This is the only situation where benefit can be paid to more than one person for a single death.

For both high rate BSP and widowed parent’s allowance, the partner needs to be either pregnant when the late partner died or entitled to child benefit. This won’t be a problem when it is the surviving partner who was getting child benefit, but problems can arise if the late partner was the claimant. For BSP, as long as the surviving partner later ‘becomes entitled to child benefit’,13Reg 4(4) BSP Regs they are entitled to BSP – there is no time limit in which to claim. Child benefit can only be backdated three months but as long as it is claimed at some point (most partners will have claimed after their partner died anyway), BSP can be paid from the date the partner was first entitled under the Remedial Order, even if that is before child benefit starts. Widowed parent’s allowance, as ever, is more complicated. The surviving partner must be ‘entitled to child benefit’14s39A(2)(b) SSCBA 1992 which means that to get maximum backdating, they must have claimed child benefit within three months of 30 August 2018. Otherwise widowed parent’s allowance can only be paid from the date they were awarded child benefit. Another difficulty can arise where a partner elects not to be paid child benefit to avoid liability for the high-income child benefit charge. Here it is just payment that stops,15s13A Social Security Administration Act 1992 meaning the claimant continues to be entitled to BSP or widowed parent’s allowance – however, we know from calls to the bereavement benefit helpline that the DWP doesn’t always understand this.

BSP is disregarded as income for all benefits and tax credits. It is not an overlapping benefit (the £3,500 initial lump sum is capital and ignored for 12 months). Widowed parent’s allowance, however, counts as income for legacy benefits, subject to certain disregards (though there are no disregards for UC). It also counts as income for tax credits and it is an overlapping benefit. This may lead to difficulties because, as we now know, for means-tested benefits, arrears are to be treated as income for the past period they cover.

The Remedial Order makes various amendments to provide that lump-sum payments of widowed parent’s allowance and BSP are to be disregarded as capital for means-tested benefits.16Art 10 and Sch BB(R)O However, contrary to expectation, this does not mean that such payments are not treated as income in the arrears period they apply to.

In its response to the Joint Committee on Human Rights (JCHR), the DWP agreed with the recommendation that ‘ensuring that those who would receive retrospective payments under the Remedial Order are not disadvantaged’.17Government response to JCHR report, para 17, available at gov.uk/government/publications/the-bereavement-benefits-remedial-order-2022-explanatory-memorandum It is confirmed both in the JCHR response and in the Explanatory Memorandum to the Remedial Order that, given the size of the arrears and the impact on benefits, benefits payments would be ‘treated as capital and disregarded for a period of 12 months’.18Explanatory Memorandum to BB(R)O, para 7.15 However, the terms of the Order do not prevent them from first being treated as income. Rather, as is usual for benefit arrears, they are treated as income for the past period they are paid in respect of under the principle that benefits which count as income retain that character when paid late (see, for example, R(S/B) 4/89). The Remedial Order does nothing to change that. Because arrears are treated as income, they will be reduced by means-tested benefits already paid for the same past period. It is only any amount remaining which is then treated as capital and disregarded – and, as a general point, any benefit income left over at the end of the period for which it has been paid becomes capital. The government has now confirmed that widowed parent’s allowance arrears will be treated in this way and also that the normal rules on deprivation of capital will apply.19See note 9

For partners getting a means-tested legacy benefit (excluding housing benefit – HB) for part or all of the same period, widowed parent’s allowance arrears will be offset20Reg 5 Social Security (Payments on Account, Overpayments and Recovery) Regulations 1988 No. 664 against those benefits already paid, subject to the usual disregards. Although DWP could, under section 74(2) of the Social Security Administration Act 1992, ‘abate’ arrears against UC, their intention is not to do so.21See note 9 Instead, overpayments of UC will be created and recovered in the usual way. Arrears will be paid in full and disregarded as described above. However, partners may want to keep the payment so they can repay the overpayment in one go. Arrears may also result in HB overpayments. It is not clear if or how DWP will notify local authorities but it is advisable for partners who were getting HB to notify the local authority themselves.

Overlapping benefits (eg, contributory employment and support allowance or carer’s allowance) paid for the same period will be offset against widowed parent’s allowance arrears.22Reg 4 Social Security (Overlapping Benefits) Regulations 1975 No.554 For tax credits, rather than counting as income for a retrospective period, arrears of widowed parent’s allowance are treated as income in the tax year they are paid.23See note 9 This means that claimants will not have tax credits overpayments for previous tax years, but if they are still getting tax credits, their current award may be affected.

Although retrospective payments of widowed parent’s allowance are treated as income, this should not have much impact on the benefit cap (which only applies if someone is entitled to UC or HB). In particular for UC, as widowed parent’s allowance counts as income (ie, so as to reduce entitlement), it will not make any difference to the total amount of benefit in payment.

There has been uncertainty about whether someone previously refused bereavement benefits, either by the DWP or at the First-tier Tribunal, would be able to make a new claim under the Remedial Order. However, the DWP has confirmed that partners in this situation will not be disadvantaged by a previous refusal because: ‘The new claims in this situation would be made under a different set of eligibility rules in the context of the draft Remedial Order.’24Letter from Baroness Stedman-Scott to Joanna Cherry MP, 22 December 2022, available at depositedpapers.parliament.uk/depositedpaper/2284906/files They are therefore not prevented from making a new claim and should do so – they will not be contacted either by the DWP or HM Courts and Tribunals Service.