Johnny Timpson's Blog

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BEREAVEMENT BENEFITS AND THE NEED FOR FAMILY FINANCIAL RESILIENCE

The Coronavirus pandemic has prompted the UK government to improve the bereavement benefits for those working in the NHS, by offering a death in service benefit.  While a welcome addition for those employed by the NHS, it highlights the minimal state provision for bereavement benefits currently available to all.

Following the little known bereavement benefits change a couple of years ago, the need for family protection has never been more important.

THE MODERN WELFARE STATE
It’s almost 78 years since the publication of the Beveridge Report that ushered in the modern welfare state, and we are now 3 years on from the most significant reform to working age benefits since the time of Beveridge.

The lack of support for bereaved mothers and children was one of the ‘evils’ that Beveridge wanted to tackle with the ‘giant’ of a specific suite of bereavement benefits.

The April 2017 reform introduced a new Bereavement Support Payment benefit, which replaced the existing Bereavement Payment, Bereavement Allowance and Widowed Parent’s Allowance benefits*. The impact of the reform is especially felt on the support provision now available to widowed parents with dependent children.

Despite inflation ticking up, the level of support is now £350 per month with discretionary increases, and the provision period is 18 months*. Previously, this support was the equivalent of £450 per month, paid bi-weekly and indexed*, with the support period lasting until the youngest child ceased to be financially dependent – which could mean a support period of up to 20 years.

The benefit continues to be conditional, with neither the previous nor the new bereavement being available to parents who were in a cohabiting relationship with their deceased partner.

The number of couples cohabiting outside marriage recently hit an all-time high of 3.4 million**!  This significant growth in cohabiting families in the UK, is a very real but largely unknown issue.

The supporting rationale for the change to bereavement benefits for parents with children was the provision of back to work support from Universal Credit plus the availability of increased free childcare.

TIME TO REVIEW FAMILY PROTECTION NEEDS
The reform to the welfare bereavement benefit provision available to working age families and the lack of support to those in cohabiting relationships, gives good reason to review clients’ family resilience and protection needs. It’s worth considering the merits of a simple indexed family income benefit cover, which can provide financial support to your clients and their families, should the worst happen. In addition to this, counselling and support services available from Scottish Widows Care, provided in partnership with RedArc, can provide bereaved parents with practical advice, signposting to specialist services such as childcare and emotional support needed at such difficult times.

I’m proud of the partnership Lloyds Banking Group has with the charity Turn2us.  My colleagues signpost customers to Turn2us, to help ensure individuals are aware of the support and benefits that they are entitled to, including child care costs.

Following the Coronavirus outbreak Turn2us have added a dedicated Covid-19 section to their website with the latest guidance. This sits alongside the already comprehensive calculators and information on bereavement benefits, child care and Universal Credit - www.turn2us.org.uk

Sources:
*www.turn2us.org.uk
**ONS, 2018

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