Bereavement Benefits Slashed

Family’s that have lost a loved one to be left up to £12,000 worse off under new benefits from April

Families will now receive financial support for just 18 months after the death of a parent from April, instead of the current 20-year period and it is expected that as many as 6,000 families could be affected by the benefits cut.

Grieving families could be left up to £12,000 a year worse off because of a government shake-up of the bereavement benefits system. The House of Commons approved the Bereavement Support Payment Regulations paper on Tuesday, which will cap support for the next generation of widowed parents from 6 April this year.

The cuts will save the government £100 million a year, but will affect as many as 6,000 of the 8,500 families expected to claim in the next year because of loss.

At present, families with children are entitled to support for up to 20 years after the death of a parent.

Currently the government currently offers a £2,000 tax-free sum called a Bereavement Payment when a spouse or civil partner dies. Where children are involved, there is a Widowed Parent’s Allowance - a taxable benefit of up to £487.71 a month (£5,852 a year) to help with household costs and childcare. This is taken from the National Insurance contributions of the late husband or wife and is paid until either the youngest child in the household no longer qualifies for child benefit (a maximum of 20 years), or the widowed parent moves in with a new partner, or reaches state pension age.

For those who are between 45 and pension age without dependent children, there is the Bereavement Allowance, a taxable benefit of up to £112.55 a week paid for 52 weeks.

The current Widowed Parent’s Allowance is being replaced by a new Bereavement Support Payment from April 6, 2017.

The '£2,000 Tax-Free Childcare Scheme'? What you need to know

Under the new scheme, instead of receiving support until the youngest child leaves school - maximum 20 years - parents will receive support for just 18 months.

Those with longer-term support needs will then be moved onto Universal Credit - the new all-encompassing benefits system.

But that means after six months, depending on the age of their youngest child, parents may have to look for or take up work, or face benefits sanctions.

Under the new system, this is what will happen if a spouse or civil partner dies after April 6 this year:

• There will be a tax-free lump sum of £2,500 if there are no children, or £3,500 if there are. This means families with children will receive an extra £1,500, and those without kids, an extra £500 tax-free.
• A monthly tax-free payment of £100 if you don’t have children and £350 if you do will also kick in. This will run for 18 months, regardless of your age or whether you marry or move in with a new partner.

The Department for Work and Pensions (DWP) has described the current system as "outdated" 

The government says the reform is an upgrade of the current "outdated" system. All amounts paid out will be tax-free for the first time, and disregarded from other benefits and the benefits cap.

Widows and widowers without children will also be entitled to bereavement support for up to 18 months for the first time, an entitlement that currently doesn't exist.

In a statement in January, the Department for Work and Pensions said: "The old system, introduced more than 90 years ago, was based on the outdated assumption that a widowed parent relied on their spouse for income, and would never work themselves.

"The new Bereavement Support Payment restores fairness to the system and focuses support during the 18-month period after a loved one dies, when they need it the most."

"The government has claimed that this system will be fairer – but there is nothing fair about taking money away from families who are already suffering so much.

"These payments are made based on your late spouse’s National Insurance contributions – it is, in effect, the pension they never got to claim.

Children whose parents weren't married won’t get the support

Although the government describes the reforms as a modernisation of the current system, it will not apply to families where parents were not married.

ABC comment: this seems a very strange ‘modernisation’ to us.The people who died paid into the system and did not collect the benifits they were entitled to. The government is expecting people to pay the same amount of National Insurance and get less and less in return.