Widowers win equality

New bereavement benefits will replace widows benefits for anyone whose husband or wife dies after April 8 2001. For the first time, widowed men will have the same rights as women to some financial help when they are bereaved. The changes were forced on the Government by the European Union, and in order to pay for them, there will be less help generally for bereaved people who do not have dependent children. When the new rules were first set out in November 1998, the Government said the changes would eventually lead to savings of around £500 million a year, although in the short term the Government is expecting to pay out more - an extra £100 million in 2001/02. People who were widowed BEFORE April 9 2001 will continue to get their benefits as they are now.

The changes are complicated. In principle bereaved men and women should be treated equally. However, some differences will remain in the way that men and women can use their late spouse’s National Insurance contributions and when they can inherit their additional pension, or SERPS. Those discriminations will remain until 2010. Saga Magazine has discovered that there is widespread confusion and misunderstanding in the Department of Social Security about exactly how the new bereavement benefits will operate and integrate with retirement pension. There are bound to be a lot of mistakes.

Bereaved
The new bereavement benefits will be available equally to a man or a woman whose spouse dies on or after April 9^th. That is a big advance for widowed men – at the moment a man gets very few benefits from his late wife’s National Insurance contributions. In some ways, this was discrimination against women – they pay the same National Insurance contributions but buy fewer benefits with them. The changes have been introduced because the European Union is progressively outlawing all discrimination between men and women. However, they are not as generous as they seem at first sight and will leave some bereaved husbands with very little.

Bereavement payment
The current payment of £1000 on the death of a husband will be doubled to £2000 and extended to men on the death of their wife. The money is tax-free and but it does count as part of your capital if you claim income support. The payment is only made if the person who dies meets two conditions. First, they must have paid enough full National Insurance contributions. Roughly speaking that means working for six months and paying full National Insurance contributions at any time in their lives. Most people will fulfil this condition. Second, there is an age condition and many older people will be excluded. Someone who is under pension age when their spouse dies will qualify. Someone who is over pension age when their spouse dies will only get the payment if the person who died is not getting retirement pension. So someone who is over pension age when their spouse died (60 for a woman or 65 for a man) AND their spouse got a retirement pension WILL NOT get the £2000 payment.

Raising the bereavement payment to £2000 from the £1000 previously paid to widows is not as generous as it seems. The amount has not been increased since widow’s payment began in 1988. By April 2001 it would have to be around £1650 simply to restore its value to what it was worth in 1988.

Bereavement allowance
At the moment a widow without children who is over 45 when she is bereaved is given a weekly widow’s pension until she reaches 60. But from April a bereaved person in those circumstances will only get a weekly allowance for a year. After that the money will stop.

Bereavement allowance will be paid on a sliding scale starting at £21.75 a week for someone bereaved at 45 rising to the full rate of £72.50 a week for someone who is between 55 and pension age when they are bereaved. The allowance is taxable. It will only be paid where the person who has died has paid enough National Insurance contributions. For the bereaved partner to get the full allowance, their spouse must have paid full National Insurance contributions for most of their working life. And if they have paid for less than about a quarter of their working life then the bereaved person will not get the allowance at all. As women tend to have a worse National Insurance contribution record than men, many widowers will not get the full allowance and some will not get it at all. Unlike the widow’s pension, the bereavement allowance will not include any of the SERPS earned by the late spouse.

Widowed parent’s allowance
A widowed man or woman who has dependent children will get a more generous benefit than someone without children. The present widowed mother’s allowance is being extended to widowed fathers as well. A widowed parent will get £72.50 a week plus £9.70 for the first child plus £11.35 for each other child – child benefit is paid on top of these amounts. Widowed parent’s allowance is paid on the basis of the National Insurance contribution record of the person who has died, not the person who claims it. So a widower whose wife did not do much paid work may find he does not get it.

People who do get widowed parent’s allowance will also get their late partner’s SERPS. However, for deaths which occur after October 5 2002, the SERPS paid may be reduced. The reduction will depend on the date of birth of the spouse who dies and could be as much as 50% (see Saga Magazine February 2001).

Men can claim widowed parent’s allowance from April 9 even if their wife died before then, as long as they fulfil the conditions and, of course, she fulfilled the National Insurance conditions.

Once the youngest child stops being dependent, widowed parent’s allowance ends. If the parent is aged 45 or more at that time then they can claim the bereavement allowance which is described above. It will be much less money and only last for a year.

Cohabitation
Bereavement benefits are not paid to people who are married to someone else or living together as if they were married. The benefit stops being paid while the widowed person lives with someone, but is restored if they part. However, the £2000 bereavement payment cannot be paid if it has once been refused because of cohabitation.

Bereavement benefits are only paid to people who were legally married to the person who died – unmarried couples are excluded.

Retirement
At pension age – 60 for a woman, 65 for a man – any bereavement allowance (or widowed parent’s allowance) will normally stop. A man or woman who has been widowed may be able use the contributions earned by their late spouse to help them get a full retirement pension. Men and women should now be treated equally but the rules are very complicated. Anyone in this position should seek advice – and don’t take ‘no’ for an answer!

Even more obscure are rules about how a widow or widower inherits the graduated retirement benefit or SERPS earned by a spouse who has died. At the moment, a spouse will normally get half their late spouse’s graduated retirement benefit and, at the moment, all their SERPS. The rules change for people who are widowed after October 5 2002 AND where the person who died was under pension age at the time. In those circumstances the surviving spouse may inherit as little as half the SERPS earned by their late spouse (there are more details about inherited SERPS in Saga Magazine February 2001). To inherit any SERPS at all someone who was widowed under pension age must have claimed either bereavement allowance or widowed parent’s allowance AND not remarried before pension age. And there are still differences in the rules between men and women which will last until 2010. Any inherited graduated retirement benefit or SERPS is normally paid in addition to any earned by the widow or widower themselves.

DISABILITY BENEFITS

Some changes are also starting in April to incapacity benefit. They will only affect people making a new claim after April 9 2001.

First, there is a new means-test. Incapacity benefit will be reduced for anyone who has a pension from their job or a personal pension of more than £85 a week. Incapacity benefit will be reduced by 50p for each £1 of pension above £85. So the whole of the long term rate of incapacity benefit of £69.75 will disappear if someone has a pension of more than £225 a week.

Second, new claims will be more difficult to make. Someone claiming incapacity benefit has to have been working and paying National Insurance contributions in at least one year in the three years immediately before the claim. That will stop claims by people who have been unemployed for extended periods. The Government hopes to reduce the number of people claiming incapacity benefit by more than 150,000.

However, some disabled people will be given higher rates of income support. There will also be higher rates for their carers who will now get an extra £10.25 a week. The Government says that will mean extra money for more than 200,000 carers.

April 2001

e-mail Paul Lewis on paul@paullewis.co.uk