Royal London's Simon Cox explains the recent govt response to bereavement benefits and why the system still needs an overhaul.
The government's recent response to the Work and Pensions Select Committee report on support for bereaved people was disappointing.
This was a chance for the government to commit to overhauling an antiquated and unjust state benefit system.
However, the response suggests that the Government will tinker around the edges instead of addressing the systemic issue and the inherent problems are likely to remain.
In the UK the Social Fund Funeral Expenses Payment is the state benefit which helps people on a low income with certain funeral costs for a relative or close friend.
The fund meets necessary costs such as doctors' fees and burial or cremation costs and it also contributes to other costs up to a maximum of £700 including funeral directors and ministers.
In its current form, the fund is no longer fit for purpose as it fails to support the most vulnerable in society at a sensitive vulnerable time, with its complex and outdated eligibility rules.
Applying for the fund requires filling out a form more than 20 pages long and waiting an average of 17 days for a decision - when the average time between death and a funeral taking place is 13 days.
This means that some of the most vulnerable people have to commit to significant costs before they know whether they will receive any help with funeral costs or how much they will get.
The current process also needs to be re-designed as it is likely to lead bereaved people into debt. Payment from the fund is inadequate - on average £1375 - which falls way below the average cost of a funeral which our latest research shows is £3,702.
People don't shop around for a funeral as they are naturally distressed and therefore not following normal consumer behaviour.
There are currently no safeguards in place to ensure people are aware of the range of costs and services available to them.
They have no form of redress once they find out the result of their social fund funeral expenses payment application and the funeral is likely to have taken place already.
Other elements of the UK bereavement benefit system have failed to keep pace with social change.
The National Insurance system introduced in the 1940s, restricted entitlement to benefit following the death of a partner to married women.
At the turn of the 21st century entitlement was extended to widowers, and shortly thereafter to civil partnerships.
But the system continues to ignore cohabitating couples, despite the fact that six million people in the UK are now cohabiting.
As a result of this omission, when one person in a cohabiting couple dies, their surviving partner is not entitled to a lump sum Bereavement Payment, a weekly Bereavement Allowance or a weekly Widowed Parent's Allowance.
We estimate the cost of the living together penalty is around £82 million each year, with a typical older bereaved person potentially missing out on around £7,800 in benefit, whilst a younger bereaved parent could lose more than £25,000.
Advisers should ensure clients have cover in the event of death and this is particularly important if they are co-habiting couples, as they are unlikely to be entitled to bereavement benefits.
While it's good to see the government engaging with the issues around bereavement benefits, the non-committal response is disappointing.
We urge the government to follow in the footsteps of Scotland which introduced the Burial and Cremation (Scotland) Act in March this year, which tackles much of the funeral poverty agenda and lays out a plan to deal with it.
Simon Cox, protection proposition (consumer) at Royal London