Most bereaved parents will be worse off under bereavement benefit changes

Published on 25 October 2013

LITRG are supporting representations made by the Childhood Bereavement Network (CBN) to MPs debating the proposed changes to bereavement benefits in the Pensions Bill. The next debate in Parliament will be held on 29 October 2013.

Under the current system, a widow or widower could expect:

  • a one-off payment of £2,000 and
  • a monthly allowance of up to a maximum of £108.30 per week paid until the youngest child leaves full time education

The Government is proposing instead:

  • a one-off payment of £5,000 and
  • a monthly allowance (payable for 12 months) of £400 for claimants with dependent children.

Instead of financial support that might extend over several years if the child was young when the parent died, the entitlement will be for only one year.

Even though the level of the lump sum element of the payment has significantly increased, the vast majority of bereaved families with children will be much worse off, as shown in the CBN’s blog.

For example, a family of one widowed parent with at least one child aged 14 could be worse off by around £12,360, assuming that under the present rules they would claim widowed parents’ allowance for the average period of four years.

The incidence of tax on the new benefit is not clear from the Bill. Needless to say, the position of most bereaved families will be ameliorated if the payment is to be tax-free and LITRG have helped draft proposed amendments to secure this. The new benefit, like its predecessor, is contribution-based but the entitlement conditions are more restrictive; again, LITRG have drafted amendments which, if passed, would restore the previous position. Every little helps: in the CBN’s words: ‘We can’t know which families will be affected by the death of a parent in years to come. We do know that whoever they are, they will be struggling to help their children rebuild their lives, and need all the support and time that we can afford them.’

The CBN have produced a sample letter for constituents to send to their MPs if they wish.

(25-10-2013)

Contact: Meredith McCammond (please use form at /contact-us)