will the bastards be stopping the one-off Sterling 2,000.00 death benefit?
From the House of Commons notes on the Pensions Bill:-
Bereavement support payment
Steve Webb: I beg to move amendment 1, page 14, line 11, after ‘dies,’ insert—
‘() the person is ordinarily resident in Great Britain, or a specified territory, when the spouse or civil partner dies,’.
The Chair: It will be convenient to discuss Government amendments 2and 3.
Steve Webb: We move on to part 3 of the Bill, which relates to reforms of bereavement support payments. It may help to explain the purpose of amendments 1 to 3 if I briefly explain the framework of the reforms contained in clauses 27 and 28.
As the Committee will know, with the exception of changes made for widowers about a decade ago, the system of support for bereaved families has been largely
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unchanged since the post-war period. It was very much based on the assumption that men went out to work and women stayed at home—a woman who lost her man, lost her income, and therefore needed a national insurance benefit for herself and her dependent children. It is perfectly proper for a Government in the 20-teens to ask whether that model is any longer appropriate. The current model has several problems. For childless widows and widowers, there are obscure and complex age rules. For example, what one might think of as the widow’s pension, or the bereavement allowance, is not payable at all for those under 45. It is payable on a tiered basis up to the age of 55, and then there are complicated contributions rules overlaying all that. Most people would feel that that is a degree of complexity. For someone who is a young widow or widower, it is hard to see why there should not be an entitlement to any help over the following 12-month period. Therefore, dealing with the gaps in the system is one factor.
The second factor is the support given to bereaved parents. As I said, the existing system almost reflects a 1940s model: a bereaved parent has lost the breadwinner, who would have supported them for as long as their children were children, and therefore, that person should have an allowance that runs for 16 years, 18 years, or whatever. Although absolutely nobody would want to be in a bereaved parent’s position, the reforms are trying to focus the financial help that is given to bereaved parents on the time of bereavement and the immediate period thereafter, while putting in place a longer-term system of financial support for those who do not return to the labour market. Therefore, the idea of the reforms, both for the childless and for bereaved families with children, is to concertina the support into a substantially increased grant, death grant, or lump sum, consisting of several thousand pounds more than the current figure, we envisage. Monthly payments will then be paid over the following 12 months; those are essentially a broken-down bit of that first lump sum. Essentially, that replaces an ongoing weekly pension that can go on for the best part of two decades, in extreme cases, with very substantial help in the first part of the period.
One of the changes we are making is to relax substantially the national insurance contribution rules. Whereas the bereavement allowance currently requires extensive payments—a lifetime’s worth—of national insurance for a full pension, we think that is simply inappropriate. In fact, the contribution rules have been so dramatically relaxed that we require only 25 weeks’ national insurance. In other words, someone must spend less than a year in the system to qualify for the payment. A problem with that, which we identified after we printed the Bill—as the Committee might work out, that is why we have tabled the amendment—is that that would mean that bereaved people around the world, who, I hesitate to say, even if they had not seen the white cliffs of Dover, had certainly spent six months in the country paying national insurance, would qualify for a bereavement lump sum. Given that the amounts of money are substantial, we did not think it the priority for the British taxpayer to pay bereavement support payments to bereaved people around the world—although, of course, we sympathise with them—who have simply had a passing acquaintance with the country.
Amendments 1, 2 and 3 together set out that there will be a test of being ordinarily resident in the country, of the sort that is familiar in the benefit system. Amendment
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1 would prevent persons living in a non-EEA or non-reciprocal agreement country, without a close connection to Great Britain, coming to the country to claim the benefit. Amendment 2 provides that the Secretary of State will make regulations that specify the rate and period of payment. Amendment 3 provides that regulations may specify countries other than Great Britain in which a person has to be ordinarily resident, such as elsewhere in the EU, to be entitled to the bereavement support payment. In a sense, the set of amendments—the matters we are dealing with narrowly at this point—simply try to ensure that we pay the money to people who have contributed to the system and who are ordinarily resident here, which I am sure is what the public and Parliament would expect us to do. On the strength of that, I commend the amendments to the Committee.
Gregg McClymont: Amendment 1 seems pretty straightforward and I have nothing further to add. However, will the Minister elaborate on the impact of amendment 2, which would insert the phrase
“leave out ‘Regulations are to’ and insert ‘The Secretary of State must by regulations’.”?
Bluntly, what is the amendment’s point and how does that change materially affect the Bill?
Steve Webb: I am grateful to the hon. Gentleman for that question, because, as I entirely accept, the answer is not self-evident. I can reassure him that it is a minor and technical amendment, clarifying that the Secretary of State will—that is the important word—make regulations under subsection (2), which specify, as one would expect, the rate of payment for this benefit and the period of payment. It requires the Secretary of State to do that; it is a tidying-up amendment.
Amendment 1 agreed to.
Amendments made: 2, in clause 27, page 14, line 13, leave out ‘Regulations are to’ and insert ‘The Secretary of State must by regulations’.
Amendment 3, in clause 27, page 14, line 26, at end insert—
‘“specified territory” means a territory specified in regulations made by the Secretary of State.’.—
(Steve Webb.)
Question proposed, That the clause, as amended, stand part of the Bill.
Steve Webb: I have given the Committee a flavour of the thinking behind these reforms, but I will just run through clause 27.
As we would expect, the trigger for the bereavement support payment is that the person’s spouse or civil partner dies. This does not apply to cohabiting couples, which may be an issue we want to discuss, but in line with current provisions for bereavement benefits this is based on legal marriage and civil partnership. It applies to people who, when they are bereaved, are under state pension age; obviously, there are different arrangements for provision for widows and widowers above state pension age, through the pension system. It is a contributory system and the contribution test is set out in clause 28, so I will not dwell on that now.
Clause 27(2) as now amended requires the Secretary of State to specify what the rate of benefit is and how it long goes on for, which we thought we probably should
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do. The rates can be different. For example, there could be—as we envisage—an initial rate and a rate per month, and there could be different rates again, as in subsection (4). We envisage higher rates for people entitled to child benefit. So we envisage that the lump sum would be higher for families with children. We do not currently envisage that the periods will vary between families with children and families without children, but we have put that flexibility in. One of the reasons we have done that is that this package of measures is not about saving money. At the illustrative rates we have provided, it will cost the Exchequer an extra £110 million in the next Parliament, so it does not save money in the next Parliament. However, in the long term, as the grandfathered recipients—for want of a better phrase—of the old benefits gradually come out of the system, the replacement system will, over time, start to save money.
