Funeral Expense Assistance (Scotland) Amendment Regulations 2024: business and regulatory impact assessment

The Funeral Expense Assistance (Scotland) Amendment Regulations 2024

Purpose and Intended Effect

Background

The purpose of these amendments is to introduce improvements to the Funeral Expense Assistance, which is more commonly known as Funeral Support Payment (FSP). The amendments will help support bereaved people by introducing changes that will make FSP more equitable. These changes will also future proof the regulations to allow FSP to be awarded for a funeral which involves alkaline hydrolysis and ensure the regulations reflect policy intent. The Scottish Government published their consultation analysis report on alkaline hydrolysis in April 2024.^[1] Alkaline hydrolysis is also available outside the UK and this change to regulations will allow FSP to be awarded, assuming all other eligibility criteria are met.

The improvements were identified following the publication of the FSP evaluation on 1 July 2022 and through discussions with internal and external stakeholders. When FSP was first implemented in Scotland, DWP regulations for Funeral Expenses Payment (FEP) were largely replicated under the safe and secure approach to transition of legislation and benefits.

This Business and Regulatory Impact Assessment (BRIA) has been developed to accompany the regulations. The focus of the BRIA is on the changes that these amendment regulations will make to FSP. This impact assessment builds on the suite of impact assessments that were produced prior to the launch of FSP.^[2][3][4][5]

A corresponding Equality Impact Assessment (EQIA), an Islands Communities Impact Assessment (ICIA), a Fairer Scotland Duty Assessment (FSDA) and a Children’s Rights and Wellbeing Impact Assessment (CRWIA) have also been produced. A Data Protection Impact Assessment (DPIA) was not required for this set of amendment regulations.

Objective

The Scottish Government replaced the DWP Funeral Expense Payment (FEP) in September 2019. FSP is a one-off payment for eligible people on a low income to help towards the costs of a funeral. The benefit is intended to help alleviate the burden of debt clients may face when paying for a funeral and help to reduce funeral poverty.

Funeral Support Payment (FSP) is made up of 3 parts:

1) burial or cremation costs

2) a flat rate payment for ‘other funeral costs’ at either –

• the standard rate of £1,257.75 for other expenses for most clients; or
• £153.50 if the person who died had a pre-paid funeral plan

3) other costs can include travel costs incurred by clients; transport costs to transfer the body of the deceased and some document costs and medical costs.

FSP targets support to bereaved individuals on a low income. The client, or their partner, must be in receipt of a low-income qualifying benefit. The qualifying benefits are used as a proxy for means testing and are also used to check other criteria such as identity and residency.

To meet FSP eligibility criteria, it must be deemed reasonable for the client, or the partner of the client, to have accepted financial responsibility for the funeral. The client does not need to be the nearest relative of the deceased if it is considered reasonable for the client to have accepted responsibility for the costs of the funeral. The application must be made within 6 months of the funeral taking place. This deadline can be extended by 20 working days if the client or their partner is in receipt of a backdated qualifying benefit, which falls within the 6-month application window and is also within 3 months of the client being informed of the backdated award.

Between launching on 16 September 2019 to 30 June 2024, more than 30,000 FSP applications have been authorised. Providing £51.1 million of support to almost 27,000 bereaved people at a time when they need it most, with £3.1 million paid out in the 2024/25 financial year.^[6]

We are introducing the following changes to FSP regulations:

• Allow full application of a reasonability test when a person has been buried or cremated outwith the area in which they resided, but the place of the funeral is in the United Kingdom, to allow reasonable costs to be awarded and a consistent approach regardless of where a person is buried or cremated.
• Extend provision to allow Funeral Support Payment to be awarded in exceptional circumstances if a funeral is held outwith the UK and an award is not allowable under current regulations. This provision will have no restrictions relating to the nationality of deceased or location of funeral, but costs will be restricted. Normal residency rules of the client being resident in Scotland and the deceased being resident in the UK, will be applied.
• To ensure citizens who would have been entitled to support for funerals abroad (EU member states, Iceland, Liechtenstein, Norway or Switzerland) prior to 31 December 2020, when the implementation period (IP) following the UK exit from the EU ended, continue to be entitled. This group includes Irish citizens and EU/EEA or Swiss nationals who have obtained leave to remain in the UK by means other than the EU settlement scheme, and those who have applied under the EU settlement scheme and are awaiting a decision – the scope of this provision also captures joining family members in the first 3 months of residence.
• Introduce a change to deduct any available assets of the deceased, including assets available with confirmation and pre-paid funeral plans, that can be used for funeral costs from the award of Funeral Support Payment in all cases.
• Amend the definition of ‘funeral’ to include provision for means of disposal of human remains by alkaline hydrolysis. The Scottish Government published their consultation analysis report on alkaline hydrolysis in April 2024.^[7] Alkaline hydrolysis is available outside the UK and the first funeral involving alkaline hydrolysis in Europe is understood to have taken place in Ireland in September 2023.

Rationale for Government intervention

We are committed to reducing funeral poverty. These changes will help alleviate the burden of debt clients may face when paying for a funeral. Following the evaluation^[8] published July 2022 and discussions with Social Security Scotland and various stakeholders, we have identified several improvements that will better support the bereaved.

We know that alkaline hydrolysis as a means of disposal of human remains in Scotland has recently gone through public consultation, with the consultation analysis report published in April 2024,^[9] and may be introduced in Scotland and elsewhere in the UK. We are taking this opportunity to amend the definition of funeral to include alkaline hydrolysis in order to future proof our regulations in the event of alkaline hydrolysis being introduced in Scotland and elsewhere in the UK and for funerals abroad where it has been introduced, for example Ireland. If we do not then we may risk FSP applications being denied as alkaline hydrolysis does not fall under the current definition of ‘funeral’ within the FSP regulations.

Funeral costs have risen significantly over the past 10 years, pushing those who unexpectedly have to pay for a funeral into poverty. The support we provide via Funeral Support Payment contributes towards the Scottish Government’s National Outcomes^[10], specifically:

• we tackle poverty by sharing opportunities, wealth and power more equally; and
• we respect, protect and fulfil human rights and live free from discrimination

Consultation

Within Government

Consultation in relation to the amended regulations has included colleagues from Social Security Scotland and the Directorate for Population Health. Input from analytical colleagues has helped us understand the number of people likely to be affected by the changes we are making and the impact of benefit expenditure. Input from Social Security Scotland has allowed us to understand how the policy intent can be met and how the changes will be implemented.

External Stakeholders

There has been policy engagement with stakeholders throughout the development of FSP and since launch. This has continued throughout the planning of these proposals.

The Funeral Poverty and Funeral Support Payment reference group^[11] was established in 2016 to help to bring a variety of informed perspectives and provide feedback on proposals for FSP. Membership includes funeral directors, local government, third sector and funeral industry experts. We have had a number of meetings with the group and in November 2023 we provided an overview of our proposed changes. Further to this we have met separately with some of the individual members.

The overall feedback from the reference group was positive and members were broadly supportive of the changes. The impact on businesses in relation to the full application of a reasonability test when a person has been buried or cremated outwith the area in which they resided was acknowledged with positives identified around more of the costs being covered through the FSP award. A concern was raised around smaller businesses within island communities losing out to mainland businesses if clients could travel further and still apply for FSP. There was recognition that this change will have a bigger positive impact on people overall. Provision to allow FSP to be awarded in exceptional circumstances if a funeral is held outwith the UK and not allowable under current regulations was deemed to have positive impacts. It was noted that funerals abroad may be more complex for funeral directors, especially if a client was applying for FSP. Consensus overall was that these amendments are positive with little negative impact.

We consulted the National Association of Funeral Directors (NAFD). All changes were viewed as positive moves which will benefit bereaved people. No areas were highlighted that would disadvantage bereaved people or funeral directors. Clarification was sought around reasonability and the exceptional circumstance provision for funerals abroad; it was confirmed that case managers will review on a case-by-case basis.

Alkaline hydrolysis was of particular relevance due to the level of current interest within the funeral sector. It was felt that funeral directors who are considering installing alkaline hydrolysis facilities will see this change as a positive step. The FSP changes were viewed as progressive and the continuous improvement approach welcomed by the sector. A written piece on the FSP amendments was shared in the Funeral Director monthly magazine^[12], reaching over 800 members.

We also consulted with the Society of Allied and Independent Funeral Directors (SAIF). With regards to the application of a reasonability test when a person has been buried or cremated outwith the area in which they resided, there was a concern raised over how far the reasonability would extend and which cases would be accepted; we advised that robust guidance would be in place and each case will be assessed using individual circumstances. SAIF did not feel the introduction of an exceptional circumstance provision for funerals abroad would have much of an impact. Overall there were no areas of concern in relation to the proposed changes to FSP regulations and it was felt the impact of these changes for funeral directors would be minimal.

We met with Shetland Council Burial Services. This offered a different perspective with regards to the impact for island businesses; for example, there is currently only one funeral director on Shetland. The current population is too low for an alkaline hydrolysis facility to be feasible. There was an acknowledgement that there may be more cases of funerals involving travel for cremation or alkaline hydrolysis in the future due to a lack of burial grounds. At present the changes have no direct impact and no issues were highlighted.

We also met with Argyll & Bute Council who were supportive of the changes and could not see any disadvantages. There was an acknowledgement that the changes could benefit those who do not have easy access to crematorium facilities, such as island communities on Islay and Mull. There was also an acknowledgement that funeral directors are keen to see alkaline hydrolysis introduced in Scotland but it may take time for this to be widely adopted. The Scottish Government bringing alkaline hydrolysis under the FSP regulations at this early stage was seen as a positive step.

Although not directly linked to the funeral industry we engaged with the Scottish Women’s Convention. Overall feedback was positive and the changes welcomed. The future proofing of the regulations to include alkaline hydrolysis and the provision to consider exceptional circumstances for funerals abroad were highlighted as positive changes.

Business

We engaged with Funeral Solution Expert in December 2023. Funeral Solution Expert are an independent research and consultancy business who provide support to other businesses in the funeral plan and later life sectors. Overall feedback regarding the changes was positive and no negative feedback was shared. The importance of future proofing the regulations to include alkaline hydrolysis was highlighted, and it was suggested that the funeral industry would see this as progressive.

We also engaged with Scotmid Funerals in December 2023. Positive feedback was received in relation to the changes. It was highlighted that by applying reasonability rather than a straight cap to funerals outwith the deceased’s local area aligns with family wishes rather than being solely cost based. Again the provision for alkaline hydrolysis was welcomed to ensure clients could receive FSP if this method was chosen. It was noted that the FSP amendments are seen as beneficial for Funeral Directors.

Options

The option we have in relation to amending the FSP regulations is as follows:

Proceed with The Funeral Expense Assistance (Scotland) Amendment Regulations 2024. This will help fulfil our commitment to support bereaved families and make FSP more equitable. Doing nothing is not considered a viable option as it does not support the commitment from Scottish Ministers to tackle funeral poverty.

Sectors and Groups Affected

The main sectors affected are those who provide burial and cremation services, namely local authorities and funeral directors. Local authorities provide burial and cremation services in their local area. There are also a number of private cemeteries and crematoriums operating in Scotland, including natural burials.

There are approximately 450 individual funeral director businesses in Scotland. This figure does not include branches of bigger businesses which are counted as one business.

The majority of funeral directors in Scotland are a member of NAFD or SAIF, or both.

The number of facilities offering alkaline hydrolysis is likely to increase over time. FSP regulations will include costs incurred for alkaline hydrolysis, including fees levied by the operator (local authority or person responsible for the operation of the alkaline hydrolysis facility).

The removal of the current cap which restricts costs if the deceased is buried or cremated outwith the area in which they resided, in favour of a reasonability test, will impact on Social Security Scotland. Further data gathering by client advisors when reviewing an application may be required but this is not likely to increase processing times or require more staff as this will be done as part of the initial data gather.

Benefits

Change 1: Applying a reasonability test when a person has been buried or cremated outwith the area in which they resided and the place of the funeral is in the United Kingdom.

When current FSP regulations were drafted, the intention was to avoid excessive travel and transport costs. The general policy intent of Funeral Support Payment is to provide eligible people on a low income with help towards funeral costs, based on what is deemed reasonable. Reasonableness is applied to most elements of an FSP award - apart from when the funeral is held outwith the area in which the deceased resided. Current regulations state that no additional costs will be awarded if the deceased is buried outside the area where they were ordinarily resident.

Operationally, “the area in which the deceased was ordinarily resident” has been interpreted as “local authority area”. This has caused issues as some local authority areas do not have crematoriums meaning that the funeral would have to take place outwith the local authority area if the deceased was to be cremated. We recognised that this disadvantaged clients if they choose or need to have a funeral that involves a burial or cremation outside the area in which the deceased resided.

Current regulations disadvantage some clients when they choose or need to use a crematorium or burial ground outwith the deceased’s local authority area. The closest crematorium or burial ground is not always within the local authority area where the deceased was ordinarily resident. The reasonability test will ensure a consistent approach is used regardless of where the funeral took place.

The cost comparison will continue for funerals which take place outside the UK. If a cost comparison cannot take place, for example there is no crematorium in the deceased’s local authority area, reasonability will apply based on the costs the client is likely to incur for that type of funeral in Scotland.

Change 2: Allow FSP to be awarded for a funeral outside the UK in exceptional circumstances and an award is not allowable under current regulations.

We have identified scenarios where we want to review FSP provision for funerals abroad. We were made aware of an application that met the policy intent for a FSP award but fell outwith the current regulations. The funeral took place in an EU country, but as the client was not exercising their freedom of movement as a worker or self-employed person, in line with EU rules at that time, they were not eligible for FSP. The client would have been eligible for FSP if the funeral had taken place in the UK.

The new exceptional circumstances provision will have no restrictions relating to the nationality of deceased or location of funeral, but costs will be restricted. Normal residency rules of the client being resident in Scotland and the deceased being resident in the UK, will be applied. This will ensure that bereaved clients, who meet the policy intent and are incurring unexpected costs for a funeral outside the UK, are entitled to FSP support if a funeral takes place outside the UK in exceptional circumstances. We will also retain the existing provision for funerals in EU/EEA or Switzerland.

Change 3: Ensure that citizens who would have been entitled to support for funerals abroad (EU member states, Iceland, Liechtenstein, Norway or Switzerland) prior to 31 December 2020, when the implementation period following the UK exit from the EU ended, continue to be entitled.

Current regulations do not bring EU/EEA/Swiss citizens who have taken another legal route to enter and remain in the UK within the scope of Funeral Support Payment for a funeral in EU/EEA or Switzerland. Our proposed changes to regulations will ensure that EU/EEA/Swiss citizens, who arrived in the UK before 31 December 2020 and have a legal route other than the EU Settlement Scheme, have the same entitlement to a funeral in EU/EEA or Switzerland as persons with rights under the EU-UK Withdrawal Agreement. This provision also covers those who have applied the EU settlement scheme and are awaiting a decision – the scope of this provision also captures joining family members in the first 3 months of residence.

Change 4: Introduce a change to deduct any available funds or contributions of the deceased, including assets available with confirmation and pre-paid funeral plans, that can be used for funeral costs from the award of Funeral Support Payment in all cases.

FSP regulations, specifically regulation 11, state that a person is not entitled to FSP if assets of the deceased person, aged 18 or over, are available and sufficient to meet the costs of a funeral. This includes any lump sum, insurance policy, occupational pension scheme, burial club, pre-paid funeral plan or similar scheme.

To ensure regulation 11 is considered, Social Security Scotland guidance states that if £8,000 or more of funds have, or will be received from the estate, the client is not entitled to FSP. This figure was chosen as it is above the average amount awarded for FSP, to ensure a fair assessment of available assets. Current regulations allow for a funeral to take place anywhere in the UK and, in limited circumstances, in EU/EEA and Switzerland. The limit of £8,000 could disadvantage clients if the funeral takes place in an area where funeral costs are typically higher.

Regulation 14, which relates to deductions from an award of FSP, covers any funds or contributions that are available towards meeting the cost of a funeral. This includes;

• assets of the deceased person, available without confirmation
• insurance policy, occupational pension scheme, burial club or similar scheme
• a funeral grant, made out of public funds, in respect of the deceased person having been entitled to a war disablement pension

We will update regulation 14 to ensure that assets available with confirmation and pre-paid funeral plans are included. Allowing for these items to be deducted from an award of FSP.

If a client is eligible and there is less than £8,000 in available funds towards meeting the cost of a funeral, then the available funds amount is deducted under regulation 14 and a nil award issued if the funds available to the client exceed the FSP award.

If the total cost of the funeral was more than £8,000 and there are £8,000 or more available funds towards meeting the costs of the funeral, we could potentially disadvantage the client by denying the application. Removing regulation 11 will not change the policy intent as we will make changes to regulation 14 to ensure all available funds will be considered, potentially leading to a nil award if sufficient funds are available.

Change 5: Amend the definition of funeral to include provision for means of disposal of human remains by alkaline hydrolysis. The Scottish Government published their consultation analysis report on alkaline hydrolysis in April 2024. Alkaline hydrolysis is available outside the UK and the first funeral involving alkaline hydrolysis in Europe is understood to have taken place in Ireland in September 2023.

The Social Security (Scotland) Act 2018^[13] requires that a definition of “funeral” is included in the Funeral Expense Assistance regulations, for the purpose of determining entitlement to FSP. Currently the definition of “funeral” means a burial or cremation of a deceased person or a still-born child.

The Scottish Government published their consultation analysis report on alkaline hydrolysis in April 2024.^[14] If alkaline hydrolysis is introduced as a regulated method of disposal of human remains, an FSP award cannot currently be awarded as alkaline hydrolysis does not fall within the definition of “funeral” in our regulations.

Although the Scottish Government published their consultation analysis report for the introduction of disposal of human remains by means of alkaline hydrolysis in Scotland in April 2024, it should be noted that alkaline hydrolysis is available outside the UK and became available in Ireland in September 2023. The proposal to extend FSP provisions for funerals which involve alkaline hydrolysis would future proof the FSP regulations for Scotland in the event of alkaline hydrolysis becoming a regulated form of body disposal. This would also allow us to award FSP for a funeral which included alkaline hydrolysis outside Scotland, assuming all eligibility criteria are met. We will continue to work with Health and Social Care colleagues following the publication of the consultation analysis report on alkaline hydrolysis in April 2024, to establish if alkaline hydrolysis will be introduced as a regulated method of body disposal in Scotland and if so, when it is likely to be introduced.

Including alkaline hydrolysis in the definition of funeral ensures FSP policy is equitable. We want to ensure that we can award FSP to clients if alkaline hydrolysis is introduced as a regulated method of body disposal and they choose this type of funeral. There is a risk we may influence a client’s choice of funeral if alkaline hydrolysis is not specified within the Funeral Expense Assistance (Scotland) Amendment Regulations 2024, and this is not the policy intent.

Costs: benefit expenditure

The Scottish Fiscal Commission’s December 2023^[15] forecasts included expenditure on Funeral Support Payment, as shown in the following table:

£ million	2023-24	2024-25	2025-26	2026-27	2027-28	2028-29
Funeral Support Payment forecast	12.9	12.2	12.7	13.1	13.4	13.9

We have done an internal analysis to assess the financial implications for these regulation changes. This assessment found that only the proposal to “allow full application of a reasonability test when a person has been buried or cremated outwith the area in which they resided”, would be likely to lead to increased costs. The additional benefit expenditure of this policy is estimated to be approximately £26,000 for 2024-25 and £80,000 in future years.

Regulatory and EU Alignment Impacts

Intra-UK Trade

There is not likely to be any impact on intra-UK trade as a result of these changes.

International Trade

Changes we are making to FSP will have no impact on international trade and investment.

EU Alignment

One of the changes we are making may impact on the Scottish government’s policy to maintain alignment with the EU:

• Ensuring EU/EEA/Swiss citizens, including Irish citizens, retain the rights they acquired before the UK withdrawal from the EU

This change is relevant to alignment in that it is restoring (to a specific subset of EU citizens determined by international treaties) the rights they had by virtue of Article 7 of Regulation 1612/68, repealed by Regulation (EU) No 492/2011 of the European Parliament and of the Council of 5 April 2011 on freedom of movement for workers within the Union^[16]. This change to the FSP regulations will help maintain the standards set as it will allow assistance for EU/EEA/Swiss citizens who became resident in the UK before 31 December 2020 when the implementation period (IP) following the UK exit from the EU ended. It will reinstate entitlement to support to funeral abroad (in member states of the EU, Iceland, Liechtenstein, Norway and Switzerland) for EU/EEA/Swiss citizens who were ordinarily resident in Scotland before 31 December 2020 and who have remained in the UK under other legal routes and not under the EU Settlement Scheme.

Scottish Firms Impact Test

As detailed under the ‘consultation’ section of this impact assessment, there has been extensive engagement with a wide range of stakeholders throughout development of these policy proposals to understand the impact of the policy on the funeral industry, third sector and the groups they represent.

We met with Funeral Industry experts such as NAFD and SAIF, alongside the Funeral Poverty and Funeral Support Payment Reference Group.

We also met with a wider range of stakeholders including Scottish Women’s Convention, Shetland Council and Argyll & Bute Council.

In addition we spoke to Scotmid Funeral Directors and Funeral Solution Expert to obtain a business perspective.

Overall, the feedback received from stakeholders was that the changes being made are very positive and progressive. All engagement was conducted by video call. Minutes from the Funeral Poverty and Funeral Support Payment reference group meetings are available on the Scottish Government website. ^[17]

Competition Assessment

The Scottish Government does not believe that the amendments to FSP will have an adverse impact on the competitiveness of Scottish companies or the third sector within Scotland, the UK, elsewhere in Europe or the rest of the world. These benefits do not directly or indirectly limit the number of suppliers, nor do they limit the ability of suppliers to compete or reduce suppliers’ incentives to compete vigorously. Additionally, the Scottish Government have reached out to various stakeholders such as NAFD and SAIF and does not expect there to be any significant impact on the operational business of local authorities or the funeral industry as a whole as a result of introducing the amendments to FSP.

Will the measure directly or indirectly limit the number or range of suppliers? No

Will the measure limit the ability of suppliers to compete? No

Will the measure limit suppliers' incentives to compete vigorously? No

Will the measure limit the choices and information available to consumers? No

Consumer Assessment

The Scottish Government does not believe that the amendments to the FSP regulations will have an adverse impact on any consumer within Scotland, the UK, elsewhere in Europe of the rest of the world. Social Security Scotland has published Our Charter,^[18] detailing the service clients can expect from them.

Does the policy affect the quality, availability or price of any goods or services in a market? No

Does the policy affect the essential services market, such as energy or water? No

Does the policy involve storage or increased use of consumer data? No

Does the policy increase opportunities for unscrupulous suppliers to target consumers? No

Does the policy impact the information available to consumers on either goods or services, or their rights in relation to these? No

Does the policy affect routes for consumers to seek advice or raise complaints on consumer issues? No

Test Run of Business Forms

No new business forms will be brought in with the implementation of the amended regulations. Applications can continue to be made online, by post or by telephone. Social Security Scotland are also available in all 32 local authority areas through their Local Delivery service.

Digital Impact Test

Does the measure take account of changing digital technologies and markets?

As with all devolved benefits, applications can be taken online, by telephone or by completing a paper application. This ensures there are options for those with digital access and for those who find digital technologies more challenging. None of the changes within the scope of this proposal will impact on existing digital functionality.

Will the measure be applicable in a digital/online context?

FSP is available in a digital/online context, including the online application channel. Guidance material advising on eligibility is also available online. Guidance will be updated to reflect the amendments and to ensure changes to eligibility are clear. Further information with regards to FSP policy is readily available on the Scottish Government website^[19]. This allows potential applicants to access information quickly and easily. Information is also available in other formats for people who may find it difficult to access information online.

Is there a possibility the measures could be circumvented by digital / online transactions?

Digital and more traditional services are available.

Alternatively will the measure only be applicable in a digital context and therefore may have an adverse impact on traditional or offline businesses?

No, the service is also available by telephone, paper form and face to face though the Social Security Scotland Local Delivery Service. Clients can book an appointment to meet with an adviser at a venue within their local community or at their home and are also able to request video call or telephone appointments.

If the measure can be applied in an offline and online environment will this in itself have any adverse impact on incumbent operators?

No adverse impacts have been identified at this stage.

Legal Aid Impact Test

The changes we are making will not have any notable changes on Legal Aid. Currently, Civil Legal Aid or Assistance By Way of Representation (ABWOR) is not available for social security matters before the First-Tier Tribunal. Advice and assistance is available to provide advice to a person in relation to social security matters, however legal aid funding for representation before the First-Tier Tribunal in relation to social security matters is not available.

Civil Legal Aid will continue to be available to clients to appeal an entitlement decision to the Upper Tribunal, Court of Session or Supreme Court but we do not expect there to be an increase in cases going to Upper Tribunal as we are looking to introduce changes that will make Funeral Support Payment more equitable.

Enforcement, Sanctions and Monitoring

We have not been made aware of any new burdens for business, local government or the third-sector generated by these amended regulations with regards to enforcement, sanctions or monitoring.

The Scottish Commission on Social Security (SCoSS) is an advisory non-departmental public body who provide independent scrutiny of the Scottish social security system (including benefit regulations).

SCoSS have scrutinised these regulations and provided feedback recommending that we make it clear that we can use costs outside the deceased’s local authority area when carrying out a cost comparison for funerals abroad. SCoSS also recommended that we develop guidance on what would constitute an exceptional circumstance that would allow FSP to be awarded outside the UK and that data is collected to monitor the impact of the regulation changes.

We will act on the feedback SCoSS have provided by developing robust guidance which will be in place before the regulations come into force on 2 December 2024. We will also gather data as part of our ongoing evaluation and monitoring of the changes to regulations, with a particular focus on take-up in respect of funerals outside the UK and the exceptional circumstances provision. The first data gather is scheduled for 6 months after the regulations come into force and this data will feed into future evaluation work.

Implementation and Delivery Plan

FSP is delivered through the Funeral Expense Assistance (Scotland) Regulations 2019^[20], made under the Social Security (Scotland) Act 2018^[21]. The amendments will be implemented through The Funeral Expense Assistance (Scotland) Amendment Regulations 2024 using powers in the 2018 Act. The Amendment Regulations will come into force on the 2 December 2024.

The changes in the amendment regulations will be implemented by Social Security Scotland for FSP applications. Changes required to operational systems and guidance have been planned out in order to be introduced on 2 December in line with the regulations. This will ensure that there is no adverse impact on businesses or FSP applicants in the transition period.

Post-implementation Review

The Social Security (Scotland) Act 2018^[22] places a duty on Scottish Ministers to report annually to the Scottish Parliament on the performance of the Scottish social security system during the previous financial year, including in relation to protected characteristics. The report is to describe what the Scottish Ministers have done in that year to meet the expectations on them set out in the charter^[23]. As part of this reporting we will review the implementation of the changes.

We will continue to engage with the Funeral Poverty and Funeral Support Payment reference group to monitor the impact of the amendment regulations.

We have established a Benefit Take-up Stakeholder Reference Group. This group is a partnership of Scottish Government officials and organisations representing third-sector and local authority interests who have knowledge of issues surrounding benefit take-up. It is designed so that members can provide a valuable source of experience and expertise, acting as a sounding board for policy work going forward. Since the publication of the second Benefit Take-up Strategy^[24] in October 2021, the group has expanded to include organisations representing seldom heard groups of the population, as identified in the strategy, as well as stakeholders representing the protected characteristic groups.

Summary and Recommendation

In summary, the Scottish Government has identified that the amendments to the FSP regulations will have a small but positive impact on businesses.

The Scottish Government has worked closely with stakeholders to identify any potential negative consequences of amending the FSP regulations and will continue to do so during and after the implementation of the amendments.

We are making a number of changes to the FSP regulations that will help support bereaved families in Scotland. We have looked closely at varying funeral trends to determine the areas for improvement. We have also taken this opportunity to future proof the regulations. We believe these changes will help ensure that FSP is available to those people in Scotland who need it most.

Summary costs and benefits table

Total benefit per annum: - economic, environmental, social

Approximately 12% of FSP applications are for funerals held outwith the area in which the deceased resided. Applying a reasonability test rather than capping costs could benefit over 700 clients per annum.

Less than 1% of applications received for FSP are in relation to funerals abroad therefore the number of people affected by the exceptional circumstance provision is likely to be minimal.

The number of people affected by amending the definition of funeral to include alkaline hydrolysis is difficult to predict but the number of FSP awards is unlikely to increase. There are currently no facilities operating in the UK but we assume in the future people may choose alkaline hydrolysis instead of a more traditional burial or cremation. The client base will remain the same and it will potentially prevent people from being denied an award due to choosing a type of funeral which is not covered by the regulations. Alkaline Hydrolysis could be a more popular option in the UK or it could prove less popular, and we are unable to predict the rate in which it could develop.

The remaining changes will ensure the FSP regulations are equitable and will help ensure those that are eligible for the FSP will be able to access their entitlement.

Total cost per annum: - economic, environmental, social - policy and administrative

The only change likely to have a financial cost is to introduce a new reasonability test when a person has been buried or cremated outwith the area in which they resided. The cost of this change is estimated at around £80,000 per annum.

There is no on-going delivery cost associated with these changes.

Declaration and Publication

I have read the Business and Regulatory Impact Assessment and I am satisfied that (a) it represents a fair and reasonable view of the expected costs, benefits and impact of the policy, and (b) that the benefits justify the costs. I am satisfied that business impact has been assessed with the support of businesses in Scotland.

Signed: Shirley-Anne Somerville

Date: 05/09/2024

Shirley-Anne Somerville

Cabinet Secretary for Social Justice

Scottish Government Contact point: Michelle Rumgay

Email: michelle.rumgay@gov.scot