Funeral Expense Assistance regulations: consultation

Section 7 – Impact Assessments

As we have been assessing options for policy and regulations we have been gathering information on potential impacts and developing the following impact assessments on which we are now consulting:

Equalities Impact Assessment & Child Rights and Wellbeing Impact Assessment

It is expected that the specific changes to FEA, in comparison to the current Funeral Payment, together with the wider advantages derived from delivery through a more positive, responsive system, will impact positively on all those with protected characteristics that are eligible.

Age

We are aware there could be issues around the eligibility of younger applicants, partly in relation to their ability to be in receipt of a qualifying benefit, and partly around their ability to enter into a contract for services with funeral directors. We expect to develop policy on this matter further through engagement with appropriate stakeholders we further develop our process to deliver FEA.

The 2016/17 Social Fund Annual Report ^[viii] suggests that around one third of payments are currently made to pensioners. We have sought to understand the views of older people throughout the development of FEA, for example by having the Scottish Older People's Assembly ( SOPA) and Scottish Pensioners Forum as members of our reference group. We have also looked to engage directly with groups of older people at events such as a SOPA workshop on 23 April 2018.

As entitlement to FEA is based on receipt of a qualifying benefit, it is important that we encourage people to take up these benefits. A take up campaign ran in October 2017 aimed specifically at those aged 65+ and encouraged them to find out if they were eligible for benefits they were not currently receiving and if so, to apply for them. The campaign was carried out in partnership with Citizens Advice Scotland ( CAS), with a campaign helpline set-up for this purpose. People were encouraged to call or visit their local bureau to find out what they may be entitled to and to get help applying. An evaluation ^[ix] of the campaign has been published.

Gender

The Scottish Government is also seeking to understand whether women are disproportionately impacted by funeral poverty given they generally have a higher life expectancy. At present, there is no data available on the current gender split in applications for the Funeral Payment, making it difficult to know whether this is an issue that merits further policy development. The Scottish Government will, therefore, continue to work with stakeholders to explore this issue and would welcome any additional evidence that could be provided in response to this consultation.

Race, Religion or Belief

The DWP does not report information on race, religion or belief for the current Funeral Payment. To help the Scottish Government understand how any particular issues related to religion or belief might be addressed, a number of faith groups are members of the Funeral Expense Assistance Reference Group.

Some religions, including Islam and Judaism, have particular timescale requirements for funerals. We understand that most local authorities are able to provide faith burials or cremations although some have never received specific requests. We have heard that some faith burials may be more expensive but have so far been unable to obtain robust evidence in this area.

In addition, the Scottish Government would like to undertake discussions with faith groups on an individual basis as Funeral Expense Assistance continues to be developed. This will help ensure that, as far as possible, the assistance is fit for purpose and meets the needs of faith groups.

Disability

In order to make the system accessible for people with a range of needs and preferences and to maximise take up, there will be multiple application channels for FEA. We are considering accessibility throughout the FEA development process by including users with various disabilities in all aspects of research and design and adhering to internationally recognised digital accessibility standards all with a view towards ensuring as inclusive and positive a service experience as possible.

It has been suggested that disabled people may incur additional transport costs and could be disadvantaged in the support provided through FEA. As transport costs for an applicant arranging or attending a funeral are based on actual costs incurred, the Scottish Government's initial view is that disabled people would receive support for additional transport costs incurred as a result of their disability. However, we would welcome any further comments or evidence on this matter and on any other impacts FEA may have in relation to disability.

Pregnancy / Maternity

The current DWP Funeral Payment is available to help parents with funeral costs of a baby stillborn after 24 weeks of pregnancy. It has been suggested that we widen FEA eligibility to include provision for pre-24 week pregnancy loss. It has been highlighted that there may be societal behavioural changes in these circumstances with some families looking to arrange a funeral service themselves, instead of taking up the support currently available through the NHS.

We have sought to understand the views of the families, and the impact on other service providers through the development of FEA. This includes engagement with members of our reference group and with NHS Information Services. While families can opt to make their own arrangements at present, we heard that some families may decide to take up the support from the NHS because an anxiety about the cost involved of making their own arrangements. There is limited data available in this area. There are currently no procedures for recording why families decide to take up the support available from the NHS or make their own arrangements. In addition, many providers of funeral services (including private sector providers) already deliver their services either free or at a reduced rate in these circumstances, but there is no central record of this provision.

The Scottish Government is considering ways to further support families in these circumstances, and would welcome any additional evidence that could be provided in response to this consultation.

Gender Reassignment

No issues have been raised by stakeholders in regards to this and we do not expect the FEA to negatively impact on this group. The FEA will be payable to anyone who meets the eligibility criteria. Work has been carried out to look at inclusive forms of address and how those who have had their gender reassigned are recorded and how the system(s) will manage this change. This work is on-going.

Sexual Orientation

It has been highlighted that there may be some sensitivities around funerals for individuals who were involved in relationships where the family disapproved on the grounds of sexual orientation. Although anyone meeting the eligibility criteria, regardless of their sexual orientation, would qualify for FEA, we would welcome any further comments or evidence in this area.

Rural and Island Areas

The Scottish Government understands there may be particular challenges for individuals arranging a funeral in a rural or island location, such as availability of service choice or transport costs. We will improve awareness of the support individuals can receive for additional transport costs which is expected to have a positive impact on the support available for people in rural areas.

We will also continue to work with stakeholders to explore how these regulations will be delivered in practice and would welcome any additional evidence that could be provided in response to this consultation that may support that process.

Bereaved Parents

The Scottish Government understands that it can be especially difficult for parents to arrange the funeral of their child. This consultation paper sets out the Scottish Government's proposal not to make deductions from the payment where there an estate in the name of a child. We are also exploring ways to make the process of applying for support for the funeral of a child as easy as possible so will look to streamline the applications process wherever we can. More broadly we are considering ways to further support bereaved parents in Scotland and are engaging with local authorities, the funeral sector and other services to do this.

Other groups who may be affected by FEA

We would also welcome views or evidence on other hard to reach groups who may be affected by FEA such as gypsy / traveller communities, and homeless people.

13. Do you have any additional evidence or impacts which are not covered in the EQIA or CRWIA?

Partial Business and Regulatory Impact Assessment ( BRIA)

Background

These regulations have been brought forward as a result of the devolution settlement enacted in the Scotland Act 2016 and the overarching framework for the new Social Security system set out in the Social Security (Scotland) Bill.

The Scotland Act 2016 gives the Scottish Government legislative competence over eleven benefits including the Funeral Expenses Payment ( FEP). The Bill sets out the legislative framework for the administration of social security in Scotland and makes provision for operational functions such as managing overpayments, fraud, error and appeals.

Funeral Expense Assistance ( FEA) is a replacement for the Funeral Expenses Payment currently administered by the Department for Work and Pensions ( DWP). It is expected to launch by summer 2019.

The regulations for FEA will provide the details of the new benefit including eligibility criteria, payment level and application windows.

Objective

FEA is designed to provide support to people on low incomes with a contribution towards the cost of a funeral to help alleviate the burden of debt they may face when paying for a funeral. FEA is a key part of the Scottish Government's wider work to tackle funeral poverty as set out in the Funeral Costs Plan ^[x]

The regulations will set out the circumstances in which an applicant will be eligible for financial support to arrange a funeral, and operational functions associated with the administration of the benefit, including the calculation of the level of the award.

In order to be eligible for FEA the following eligibility criteria will have to be met:

• applicant habitually resident in Scotland, and deceased ordinarily resident in UK;
• applicant on a low income benefit or tax credit; and
• applicant responsible for the costs of the funeral; and meets the 'nearest relative test' (based on the family hierarchy lists in the Burial and Cremation (Scotland) Act 2016).

The place of the funeral may be anywhere within the UK, or, in certain circumstances, in a member state of the EU, Iceland, Liechtenstein, Norway, or Switzerland.

The regulations will also set out:

• level of financial support available. The payment is calculated in two parts:
  1) Uncapped element: towards burial or cremation costs and certain transport costs; and
  2) Flat rate: introduced at £700, for any 'other' costs incurred (£120 where a funeral plan is in place to help pay for items not covered by the plan) and will be annually uprated to reflect inflation.
• the application window – which will be from the date of death until 6 months after the date of the funeral.
• any deductions that may be made to that award such as assets of the deceased.
• provision for Social Security Scotland to administer and deliver this benefit by setting out the procedures for multiple applications, recovery from the estate of the deceased, and how the assistance will be paid.

Rationale

These regulations will expand the support available so that more individuals on low income benefits who are arranging a funeral will be eligible to receive a contribution towards the funeral costs. The individuals who will be assisted by the payment would have had to make funeral arrangements in any case but they would not have received any financial support from the DWP to do this. As at present, support for either burial or cremation will be provided by the payment. As a result, these regulations are not expected to result in a behavioural change of the applicant when they are choosing the type of funeral service they want to arrange (which might impact upon burial and cremation authorities).

The FEA payment is solely concerned with providing financial support to the individual with funeral costs. Any action taken by a burial or cremation authority in Scotland in delivering the funeral for the individual will continue to be carried out in accordance with the relevant regulations under the Burial and Cremation (Scotland) Act 2016, and in line with any other appropriate regulatory requirements.

The FEA payment will support the following National Performance Framework objectives:

• We have tackled the significant inequalities in Scottish society.
• We live in well-designed, sustainable places where we are able to access the amenities and services we need.

It will also support the following National Performance Framework indicators:

• Reduce the proportion of individuals living in poverty.
• Improve Scotland's reputation.
• Improve mental wellbeing.

In relation to the five principles of better regulation:

• proportionate – Though FEA's main positive impact is directly on applicants, the Scottish Government will look to identify and minimise any indirect negative impacts, for example administrative burdens, on local government, private businesses or third sector organisations as a result of the benefit. We will also look to identify and maximize positive impacts for the sectors where we are able to do so. For example, we will process FEA applications within 10 working days and make payments as soon as practicable thereafter. This is faster than the current FEP and is expected to reduce the amount of time that funeral directors have to carry debt, which is expected to have a positive impact on their businesses.
• consistent – The Scottish social security system take a rights-based approach to entitlement. The Scottish Government will publish guidance on the benefit so that people understand how decisions are being made. There will be a reconsideration process where an applicant disagrees with a decision and an appeal process to the Social Security tribunal.
• accountable – There are many levels of accountability in the new social security system. This starts with our commitment to applicants to understand their rights, including asking for a redetermination of a decision they are unhappy with and appealing that decision if they are still unhappy with the outcome of the redetermination, and goes all the way up to Scottish Ministers producing a yearly report on performance of the Scottish social security system. Woven in between this, the new charter will be co-designed with people that have lived experience of the system and will reflect the principles included in the Bill. Parliament will have a formal role in approving the first charter and any subsequent reviews. A new body called the Scottish Commission on Social Security will be established to ensure that people's rights are protected at a more systemic level through placing a duty on the Commission to report independently on the system's performance against the charter. The Scottish Public Services Ombudsman will be able to use the charter as an independent set of standards to deliver robust individual redress. Courts and Tribunals will also be able to take the charter into account where it is considered relevant to proceedings.
• transparent – We will develop a communications strategy for FEA. This will aim to ensure that people who are eligible, the funeral industry, local government and advice providers are aware of the benefit, know how to apply and understand the eligibility criteria. We will publish guidance on the benefit so that people understand how decisions are being made.
• targeted only where needed – FEA is targeted at people on lower incomes. There are projected to be around 56,000 deaths in Scotland each year and the Scottish Government expects to make around 5,600 FEA payments per year.

Consultation

We have looked to gather views in a number of ways including:

• Through the Social Security in Scotland Consultation which ran from July to October 2016. The section on FEA received 156 responses – 84 from individuals and 72 from organisations.
• During three roundtable meetings and the National Conference on Funeral Poverty in 2016.
• From Experience Panel members – these are people with experience of the current benefits system.
• From the FEA Reference Group, which was established in March 2016. The group has met nine times to help gather evidence, bring a variety of informed perspectives and provide feedback on proposals. Members of the group include COSLA, funeral directors, and third sector organisations such as Citizens Advice Scotland, Child Poverty Action Group, and Quaker Social Action.
• Through publication of illustrative regulations in December 2017. These were shared with the Scottish Parliament and with over 3,000 organisations and individuals through our Social Security Newsletter.
• By meeting individual organisations to discuss specific areas and interests. This includes meetings with the National Association of Funeral Directors (26 March 2018), the National Society of Allied and Independent Funeral Directors Annual General Meeting (22 February 2018), Dignity (22 January 2018), Citizens Advise Scotland (19 March 2018), COSLA (24 April 2018), the Roman Catholic Church (27 March 2018).

The 12 week consultation period on the draft FEA regulations, EQIA & CRWIA considerations and BRIA will give individuals and businesses further opportunities to comment on the potential impact on individuals, businesses, local government and the third sector. We welcome views to help us further develop the contents of this BRIA.

Sectors and groups affected

Local authorities provide burial services in their local area, along with private cemetery providers. In addition, 14 local authorities in Scotland also run crematoriums. There are 16 non-local authority crematoriums currently operating in Scotland. One of these, at Glasgow Crematorium (formerly known as Maryhill), is a charity. The others are private businesses. There are also a number of private burial providers in Scotland, such as the Roman Catholic Church and those providing green / natural burials.

There are approximately 450 individual funeral director businesses in Scotland. This figure does not include the sometimes tens of branches of bigger businesses like the Co-operative or Dignity. These are counted as one business.

Around 80% of funerals in Scotland are carried out by funeral directors who are members of the National Association of Funeral Directors or the National Society of Allied and Independent Funeral Directors. It should be noted that some funeral directors are members of both organisations, while others are members of neither.

The Scottish Government has appointed an Inspector of Funeral Directors who took up her post in July 2017. An Inspector of Crematoria has been in post since April 2015 and an Inspector of Burials will be appointed in due course. The Scottish Government does not consider that the FEA regulations will have any direct impact on the work of these inspectors. We are, however, liaising with the current inspectors to understand any indirect impacts and so that they understand the changes to support available to members of the public as a result of the introduction of FEA. If, in the future, a licence or register is introduced for Scottish funeral directors then Social Security Scotland would expect to make FEA payments only to funeral directors in Scotland who are on the licence or register. We would expect to make some payments to funeral directors in the rest of the UK and would look to take a similar position should a statutory register or licensing of funeral directors be introduced elsewhere.

Option 1 - Do nothing:

Transfer of powers to Scotland to deliver support for funerals is set out in the Scotland Act 2016 and provision has been made in the Social Security (Scotland) Bill. Therefore, not taking over powers from the DWP is not considered to be a viable option.

Benefits and Costs

There are not considered to be any benefits to this option.

If the DWP were to stop making FEP payments to Scottish applicants and the Scottish Government did not provide a benefit to replace this provision then around 3,500 people per year would be worse off as they would not receive financial support with funeral costs. This loss of support would be expected to total around £5 million initially ^[xi] . This would be expected to have an impact on the funeral industry – as more individuals would be likely to struggle to meet funeral costs and would be more likely to default on their bill. This would result in increased debt for the funeral directors which could result in some providers ceasing trading.

Alternatively, some families might decide that they were unable to afford to arrange a funeral without financial support. In these circumstances, it is expected that responsibility for ensuring burial or cremation takes place would fall to the local authority in the area where the person has died, as a National Assistance Funeral. Local authorities would need to find additional resources to meet these funeral costs – either from existing funding or through increases in burial and / or cremation fees or through increases in Council Tax rates.

Option 2 - Introduce benefit on same basis as current DWP provision:

Benefits and Costs:

If the Scottish Government provides a replacement benefit on this same basis as current DWP provision this would provide around 3,500 payments each year, totalling around £5 million benefit expenditure initially ^[xii] . The funeral industry (including public and private cemeteries and crematoriums, and funeral directors) would be expected to ultimately receive most of this in payment for their services, as is the case at present.

The costs to the Scottish Government of this option would be expected to be in line with the funding transferred from the UK Government. Implementing the current DWP model would mean that the value of the capped element of the payment, which has been frozen at £700 since 2003, would continue to lose value over time, meaning that the gap between the average payment and the cost of a funeral would be expected to grow. In continuing to freezing the capped element of the payment, and by maintaining current eligibility, there would be expected to be an increase in the level of bad debt carried by funeral directors over time, as more people struggle to pay funeral costs. Processing payments to the current timescales would mean that applicants and the funeral industry would continue to face uncertainty on the amount of time that it would take to find out whether an application had been successful.

Option 3 - Introduce FEA (recommended option):

The Scottish Government will deliver FEA by summer 2019 in Scotland, replacing the current DWP Funeral Expenses Payment. This decision followed extensive engagement with stakeholders as set out in the Consultation section of this partial BRIA.

FEA will provide a one off payment to support people on certain benefits or tax credits with a contribution towards the cost of a funeral. This is intended to alleviate the burden of debt they may face, helping to reduce funeral poverty.

Changes to FEA compared to the current Funeral Payment include:

• Using a clearer and more flexible assessment process to determine who is responsible for the funeral costs;
• Uprating the flat rate element of the payment annually in light of inflation;
• Introducing a 10 working day processing time for completed applications;
• Developing clear communications about FEA to raise awareness of the benefit and make it easier to understand in advance who is likely to be eligible for support; and
• Introducing Social Security Scotland pre-claim support.

Benefits and costs

As a result, it is expected that an additional 2,000 FEA payments will be made each year in Scotland, compared to the current DWP Funeral Payment. This will take the total number of payments to around 5,600 per annum. To support this widened eligibility, the Scottish Government expects to invest an extra £3 million ^[xiii] in FEA each year above the budget that will transfer from the UK Government (an increase of 60%). As these funerals would have been taking place in any case, the additional expenditure will benefit individuals by providing support to pay for the funeral, reducing the burden of debt they face. It is also expected to reduce the level of bad debt carried by funeral directors as more people facing funeral poverty would be expected to receive a payment with much of the additional £3 million expected to be paid to funeral directors.

The Scottish Government will also uprate the value of any relevant figures in the FEA regulations annually to take into account the impact of inflation. This requirement to uprate will apply to the £700 flat rate element of FEA. At present, we expect that this will result in around £70,000 additional benefit expenditure in the first year that uprating is applied, in addition to the £3 million of additional expenditure already committed to widen eligibility. Annual uprating of the flat rate element of the FEA payment will mean that the value of this part of the payment will not be eroded due to inflation. The Scottish Government understands that the majority of the flat rate element of the payment is made to funeral directors towards their fees.

Scottish Firms Impact Test

As set out in the Consultation section of this partial BRIA, engagement with the funeral industry and other stakeholders about FEA has been ongoing for a significant period of time, including through a National Conference on Funeral Poverty, stakeholder reference group, and meetings with individual stakeholder organisations. The Scottish Government would be happy to meet funeral directors and other businesses affected by FEA to discuss the contents of this partial BRIA and development of FEA more generally, in addition to considering written comments in response to this consultation.

Issues highlighted by funeral directors, funeral director professional associations, and local authorities to date include:

• Increasing the £700 element and committing to annual uprating

The majority of stakeholders, including funeral directors and their representative bodies, and a number of Social Security Bill consultation responses suggested that the element of the FEA payment for other expenses should be increased above the £700 maximum currently paid by DWP. This has been frozen since 2003.

The Scottish Government has considered increasing the amount payable for other expenses as part of the policy development process that has taken place for FEA to prepare these illustrative regulations. In doing so, we are balancing widening eligibility for FEA to assist more of those in need with the overall amount of the payment. This change is expected to result in approximately 2,000 additional payments per year. This is a 56% increase compared to the current DWP Funeral Payment and is the best way of assisting more of those in need who would otherwise receive no support at all.

The Scottish Government has committed, through a stage 3 amendment to the Social Security Bill, to uprate any relevant figures specified in the FEA regulations annually to take into account the impact of inflation. At present, this will apply to the flat rate for other expenses (currently £700) and will protect individuals from any further reduction to the value of this part of the payment due to inflation.

• Continuing DWP policy of making payments directly to funeral directors where there is an outstanding funeral bill

We understand that currently DWP makes the Funeral Payment directly to the funeral director on behalf of the applicant in the majority of cases. However, the applicant can specifically request the payment to be made to them if they wish, and this would clearly happen when the bill had already been paid. The current process provides the funeral director with reassurance they will receive payment for their services if the applicant is successful in their application; and reduces the administrative burden on the applicant to forward on their award to help reduce, or clear, any outstanding debt for the funeral service, at a time when they will be grieving. The funeral industry has strongly indicated that it would wish this process to continue for FEA.

We have also tested this with a number of other stakeholders. Many participants supported the idea of payments being made directly to funeral directors and felt that this would make things easier for the family. However, others felt it was important to have a choice, or preferred for the payment to be made to them. The Scottish Government has also heard that making payments to funeral directors could help avoid situations of financial abuse. It has been suggested by stakeholders representing advice providers that this policy should be delivered in a more transparent manner than at present to ensure the applicant is fully informed and able to take decisions throughout the process.

• Processing payments quickly, making a decision in principle and deposit payments

The Scottish Government has made a commitment that FEA applications will be processed within ten working days of receipt of a completed application, and payment made as soon as practicable thereafter. This responds to concerns that have been raised by organisations, including the funeral industry, that the current DWP assessment process takes too long. This commitment will provide additional certainty for applicants and funeral directors about when a payment will be made and is considerably faster than the current DWP target of 15 working days, which was met in 18.67% of cases in 2016/17. The Scottish Government will collect management information for FEA in a number of areas, including on performance against the ten day processing commitment and is considering the most appropriate means of reporting this information. This will allow FEA policy to be reviewed in the future using a robust evidence base.

A number of funeral directors and some other stakeholders have suggested that taking a decision in principle at the point of application was worth exploring as it would give people reassurance that they would receive support and therefore feel more able to plan a funeral. Following on from a decision in principle, the Scottish Government has heard that making deposit payments would reduce the risk of bad debt for funeral directors. However, there was acknowledgement from stakeholders that an incorrect decision in principle could be distressing and more difficult than the uncertainty under the present system. It was suggested that in order to be effective a decision in principle had to be provided very quickly. However, to take that decision with a sufficient level of confidence that it would not be reversed later in the process would require evidencing. That might result in a decision in principle not being provided much faster than the existing 10 day processing commitment. It was noted that this would potentially double administration requirements and therefore increase costs. We heard that some Local Authorities had tried to take decisions in principle for Housing Benefit decisions and this had proved to be very difficult in practice.

Having considered the range of views expressed, the Scottish Government has decided that the risks of taking an incorrect decision and potential additional administration costs outweigh the potential benefits of taking a decision in principle and so have decided not to take forward this proposal. Instead, we will process payments within 10 working days and will develop clear communications to make it as easy as possible for applicants and the funeral industry to understand in advance if someone is eligible for a payment.

• Removal of the lower flat rate of £120 for 'other expenses' where the person who has died had a funeral plan

The industry representative bodies for funeral directors (National Association of Funeral Directors, and the National Society of Allied and Independent Funeral Directors), individual funeral directors and some other stakeholders have proposed that the current lower flat rate of £120 for 'other expenses' is removed. At present, this rate is used rather than the £700 rate in circumstances where the deceased has made provision for their own funeral through a funeral plan, though data is not available from DWP to assess how often this lower payment amount is applied in practice. It has been suggested this lower rate may act as a disincentive for individuals to save for their own funeral. However, removing this rate would mean that some applicants would receive the full £700 in addition to having almost all funeral costs paid for by a funeral plan. These applicants would be in a better position than applicants where the deceased had made provision for the funeral in ways other than a funeral plan (for example a bank savings account) as these savings would be deducted from the payment amount. This would create an unfairness in the system. Having considered the benefits and risks of this proposal, the Scottish Government has decided not to remove the lower £120 flat rate for FEA.

• Making it easier to determine in advance who is eligible for a payment

The Scottish Government's policy intention is that eligibility will in part depend on the familial relationship or friendship that the applicant had with the person who has died. Currently, the DWP makes the decision about who is the appropriate person to take responsibility for arranging the funeral by asking the applicant a series of questions about their relationship with the person who has died. We have heard that the questions asked are intrusive and distressing (for example in relation to estrangement or financial circumstances of other family members). The complex assessment process extends the length of the current application form and we have heard that it can make it difficult to determine in advance whether someone is likely to be successful in their application.

The Scottish Government has been looking at ways to make this process less intrusive, to avoid having to make judgements about family relationships, and to make it clearer in advance who is eligible for FEA. Based on feedback from stakeholders, including the Scottish Working Group on Funeral Poverty, the Scottish Government has decided to use the lists in the Burial and Cremation (Scotland) Act 2016 ^[xiv] . These lists set out who is the nearest relative of the person who has died, so it is clearer who would make the arrangements for the burial or cremation. In addition to using the family relationship lists in this Act, a key difference from the current DWP Funeral Payment process is that if there was another family member in the same level of the list as the applicant we would not ask the applicant questions about the other person's circumstances in order to consider whether the other family member should take financial responsibility for the funeral. Instead we would accept that the applicant is an appropriate person to take financial responsibility for the funeral. This makes it much clearer before an application is made whether the applicant is likely to be successful. This additional certainty is expected to be beneficial for both applicants and funeral directors.

Competition Assessment

The four Competition and Markets Authority ( CMA) Competition Assessment Questions are:

• Will the measure directly or indirectly limit the number or range of suppliers?

  The Scottish Government does not consider that introduction of FEA will directly or indirectly limit the number or range of suppliers. For example, the Scottish Government has not specified what the £700 flat rate element of the payment should be used for, apart from that it must be for funeral costs. This means that applicants will retain flexibility to decide what services they wish to purchase, rather than being limited to certain specified elements of the funeral – which could have limited the range of suppliers. Similarly, the uncapped element of the payment will continue to fund either burial or cremation charges, so that FEA recipients are able to choose which best fits their circumstances. It is expected that the majority of people will use a funeral director but the Scottish Government will also provide payments to people who choose not to use a funeral director, so not limiting the range of suppliers that can be used.

• Will the measure limit the ability of suppliers to compete?

  The Scottish Government does not consider that introduction of FEA will limit the ability of suppliers to compete. The payment will help consumers to pay for the costs of a funeral and will not favour any particular supplier over another. We expect to work with the funeral industry as we develop the process to deliver the benefit and would welcome further engagement with an suppliers of funeral services who wish to understand better how the payment will operate.

• Will the measure limit suppliers' incentives to compete vigorously?

  The Scottish Government does not consider that introduction of FEA will limit suppliers' incentives to compete vigorously. The payment will help consumers to pay for the costs of a funeral and will not favour any particular supplier over another. Widening eligibility and ensuring that the value of the payment is not eroded by inflation should encourage the funeral industry to compete for this business, as they will have more confidence that applicants will be able to pay for the funeral costs, rather than bad debt arising.

• Will the measure limit the choices and information available to consumers?

  The Scottish Government does not consider that introduction of FEA will limit the choices and information available to consumers. The Scottish Government has been clear that the flat rate part of the payment (currently £700) should not be limited in what it is used for, simply that it must be for funeral costs. This means consumers will be free to make choices about what they wish to have for the funeral. Similarly, the payment will continue to fund either burial or cremation charges, so the consumer is able to choose which best fits their circumstances. It is expected that the majority of consumers will use a funeral director but the Scottish Government will also provide payments to people who choose not to use a funeral director, so not limiting consumer choice.

  Prior to launch, a communication strategy will be developed to ensure that applicants and the services that they come into contact with and might seek support from are aware of the new benefit, their entitlement, and how they can access it. The Scottish Government has already taken action to increase awareness of funeral options and costs through the Planning Your Own Funeral leaflet which was published in August 2017. We will continue to look for opportunities more generally to increase the information available to consumers to help them make informed choices when planning for or arranging a funeral, including those eligible for an FEA payment.

Test run of business forms

We do not anticipate the introduction of any additional forms for businesses as a result of these changes. A new form for applicants will be introduced and will replace the existing form currently processed by DWP. This form will only be introduced after an extensive user testing process. This user testing is expected to involve people with experience of the current system, potential applicants, funeral directors and other organisations with experience of the current FEP. It is expected that it will be possible to make applications online, by post or over the phone. Support from Social Security Scotland will also be available in local areas.

Legal Aid Impact Test

Someone who has applied for an FEA payment but whose application has been unsuccessful will be able to ask Social Security Scotland for a re-determination without having to supply further evidence, but the Agency will take into consideration any new evidence provided. The timescales for a requesting a re-determination and the time period allowed for the Social Security Scotland to complete the re-determination will be set out in the FEA regulations.

If the individual is dissatisfied with the re-determination outcome, they can appeal that to the First-tier Tribunal. Advice and assistance is available to enable solicitors to provide initial advice on social security appeals. Assistance in the form of representation is not available, but this is available for an onward appeal to the upper tribunal dependent on eligibility.

Legal assistance is subject eligibility testing dependent on the type of assistance sought. This may will include financial eligibility testing based on the "disposable income" and "disposable capital" of the applicant. However, where a person receives certain means‑tested benefits (such as Income Support and Job Seeker's Allowance which are qualifying benefits for FEA) they will be automatically eligible for legal assistance. Certain other benefits, such as Personal Independence Payment (which is not an FEA qualifying benefit), are not considered to be part of a person's disposable income.

The Scottish Government expects legal assistance through the statutory scheme of Advice and Assistance, and Advice by Way of Representation will continue.

Enforcement, sanctions and monitoring

There will be no additional enforcement, sanctions or monitoring of the services provided by funeral directors, burial and cremation authorities or any other businesses that supply funeral services to FEA applicants. As such, there will be no new burdens for businesses, local government or the third sector generated by these regulations.

The Social Security Bill places a duty on the Scottish Ministers to publish an annual report on the performance of the Scottish social security system. Audit Scotland will monitor and report on the delivery of the social security system, including the new Social Security Scotland Agency.

Implementation and delivery plan

FEA will be delivered in Scotland by Social Security Scotland (an Executive Agency of the Scottish Government) by summer 2019. A consultation on the draft regulations will take place in 2018 (along with the consultation on this draft BRIA) with final regulations expected to be laid in 2019.

A communications strategy will be developed in advance of launch of FEA. This will aim to ensure that people who are eligible, the funeral industry, local government and advice providers are aware of the benefit, know how to apply and understand the eligibility criteria.

FEA is a key part of the Scottish Government's work to reduce funeral poverty and we will ensure that FEA is linked into this wider work, bereavement policy, and social security policy more generally.

• Post-implementation review

  The Scottish Government will collect more robust management information for FEA than is currently available for FEP. We will use this information, along with additional sources of feedback from applicants and others, to undertake a review of FEA within 10 years of its implementation.

• Summary costs and benefits table

Option	Total benefit per annum: economic, environmental, social	Total cost per annum: economic, environmental, social policy and administrative
1	Do Nothing Scottish Government would save £5 million per year.	3,500 recipients would cease to receive funeral assistance (initially worth approx. £5 million per year). There would likely be a significant increase in funeral poverty as a result. There would likely be greater uncertainty in the funeral industry around receiving payment for services and there would likely be an increase in level of bad debt carried by funeral directors. We expect Local Authorities would face additional costs as the number of National Assistance Funerals provided by Local Authorities would be likely to increase.
2	Introduce FEA same as current DWP scheme 3,500 recipients will continue to receive funeral assistance (initially worth approx. £5 million per year).	Gap between amount of the payment and funeral costs would be expected to grow over time as capped element remains frozen at £700. This, combined with no widening of eligibility would mean an expected increase in bad debt for funeral industry and increase in unsustainable debt for people paying for a funeral. The public, and funeral directors, would face continuing uncertainty about the timescale for a payment to be made.
3	Introduce Expanded FEA An additional 2,000 payments will be made per year compared to the current DWP scheme (initially worth £3 million per year). Total number of payments will therefore increase to 5,600 per annum (initially £8 million per year). Reduced application target from 15 to 10 days will mean individuals and funeral directors will get payments more quickly. Some part of the additional £3 million per year cost and inflation linked payments will benefit funeral directors and private and public crematoriums in Scotland – some will be displaced outside of Scotland where a deceased relative is outside of Scotland. All of this cost will benefit individuals who are resident in Scotland however, tackling funeral poverty experienced by those on a low income. More widely, the simplified eligibility and improved communications will make it easier for beneficiaries to access support.	Additional £3 million cost of payments to the Scottish Government per year due to widened eligibility. Flat rate payments linked to inflation meaning the on-going cost will increase each year. In the first year this is forecast to cost the Scottish Government an additional £70,000.

Having undertaken significant engagement with a range of organisations and individuals, and taking into account the limited data available on the current FEP, the Scottish Government considers that the recommended option (option 3) to deliver FEA is the most suitable way to provide support to people on low incomes with funeral costs. We consider that implementing this model will have a positive impact for funeral directors, local authorities and private burial and cremation authorities, in addition to having a beneficial impact for those receiving a payment.

14. Do you have any additional evidence or impacts which are not covered in the draft BRIA?