The UK government provides state benefits for parents with dependent children whose partners have passed away, in the form of Bereavement Support Payments.
Previously, bereaved parents were only eligible for these benefits if they were married to or in a civil partnership with their cohabiting partner at the time of their death.
However, the law is now changing to provide financial support for more grieving parents raising children after losing their partner, regardless of the legal status of their relationship.
This means parents who were cohabiting with their partner, whom they have at least one child with, can now apply for Bereavement Support Payments (BSP).
Does this change in the bereavement benefit law affect you? Here’s what you should know about the new rules and who is now eligible to apply.
How are bereavement benefits changing?
Despite just over 1 in 5 couples in the UK living together without being married or in civil partnerships as of 2021, the UK government has brushed off most suggestions for cohabitation law reforms that would give these couples similar legal rights if they split up or a partner passes away.
Cohabiting couples are often treated unfairly by legal frameworks that don’t consider them equal to married couples or civil partners. For example, the joint income of a cohabiting couple is taken into account for state benefit claims like Universal Credit, yet they are classed as unrelated individuals for Inheritance Tax (IHT) purposes.
In the last several years, two cases challenging this differential treatment took the government to court concerning bereavement benefits. The government lost both cases – but not because of discrimination against unmarried couples. Instead, the courts found that the couples’ children were being treated unequally, against the European Convention of Human Rights.
In any case, three years after the second court judgment, the government is now introducing legislation revising the original law. The change means that if an individual in a cohabiting couple with dependent children passes away, the surviving partner is entitled to the same rate of bereavement benefits as a married spouse or civil partner would be.
This has also been backdated to the first Supreme Court ruling in the aforementioned cases, which was on 30th August 2018. It covers the legacy benefit Widowed Parent’s Allowance (WPA), too, which was replaced by Bereavement Support Payment (BSP) in April 2017.
Who can apply for backdated bereavement benefits?
The eligibility criteria changes came into effect on 9th February 2023, meaning that cohabiting parents whose partner passes away after this date may now be able to claim BSP. This is expected to help up to 1,800 more families a year, who would otherwise be struggling financially and unsupported by the state following the death of a parent and partner.
For cohabitating partners who were bereaved before this date, the Department for Work and Pensions (DWP) has opened a 12-month
application window for retrospective claims.
The Childhood Bereavement Network (CBN) estimates that around 21,000 widowed parents will now be able to make a retrospective claim. If the claimant is eligible, the government could make payments dated back to August 2018.
These families could even have been bereaved as far back as 2001
– if the partner passed away before 6th April 2017 and the survivor would have met the eligibility criteria for the replaced WPA on or after 30th August 2018, they could now apply for backdated BSP.
The amount the claimant will be entitled to depends on when their partner passed away, their partner’s National Insurance Contributions (NICs), their age, and whether they were pregnant with their partner’s child at the time of their death or have been entitled to/receiving Child Benefit for at least one child with their partner.
Unfortunately, this means that only unmarried couples with dependent children are eligible for BSP, so cohabiting couples who don’t have dependent children are still excluded and can’t make a claim.
How to claim Bereavement Support Payments
To apply for BSP, you can either use the trial online service, call the Bereavement Service helpline, or download and print a BSP1 Form to send in the post. You can find more details on Bereavement Payment Support eligibility and the information you’ll need to provide on the government website.
BSP is usually awarded as an initial lump sum of £3,500, followed by up to 18 monthly payments of £350. You may receive fewer payments depending on when your partner died, or different amounts depending on when and how they died if you are applying for WPA instead.
While BSP is a tax-free benefit, any payments after the first year of receiving it could then affect other benefit claims, such as Universal Credit. It’s important to consider how these payments, especially larger back payments, may affect your entitlements and liabilities.
While the BSP rates were set back in 2017, they haven’t been adjusted since, which means inflation has now reduced their value by up to a fifth. This is yet another reminder that the state’s ‘safety net’ for cohabiting couples is inadequate, showing how important it is to build your own financial safety net to protect your family both in the present and the future.
Here at GBAC, we provide a selection of helpful financial planning services for individuals and businesses, from tax consultancy
to wills and probate. If you would like professional fiscal advice and support with managing your family finances, contact our accountants in Barnsley to find out how our services could benefit you and your family.