Funeral Payment and Funeral Poverty Reference Group minutes: June 2017

Attendees and apologies

Attendees

• Lucy Carmichael, Low Income Benefits Policy Unit, Scottish Government – Chair
• Mohammad Ali, Muslim Council of Scotland
• John Birrell, Chair of Scottish Working Group on Funeral Poverty
• Jim Brodie, SAIF
• Simon Cox, Dignity
• Michael Davidson, Communities Analysis, Scottish Government
• Meg Fowler, Business Analyst, Scottish Government
• Colin Hunter, SLGP – Renfrewshire Council
• Catherine McKenna, Low Income Benefits Policy Unit, Scottish Government
• Ruth Mendel, CAS
• Mark Willis, CPAG
• Stewart Wilson, Cruse Scotland

Items and actions

Chair – Welcome and Introductions

1. Lucy Carmichael introduced the Scottish Government members in attendance and indicated that a multidisciplinary team was developing Funeral Expense Assistance.

General Update on Progress Developing Scottish Social Security System

2. Since the group had last met, the Analysis of Written Responses to the Consultation on Social Security in Scotland had been published, along with a Scottish Government response. Links to these had been circulated with the group. The Minister for Social Security and also the Cabinet Secretary for Communities, Social Security and Equalities had made statements in Parliament about social security. These statements included information on the Social Security Agency, and the 1st wave of benefits to go live which would include Funeral Expense Assistance. It was noted that the Social Security Bill would be introduced before summer recess. The group also noted that the Funeral Cost Plan would now be published in the summer 2017.

3. The group noted the re-naming / branding from the ‘Funeral Payment’ to the ‘Funeral Expense Assistance’ (FEA) and agreed this gave a clearer indication to applicants that the support would not cover the full cost of a funeral. The clarity of the language in the name would help manage applicants’ expectations of the financial assistance they would receive if successful. The group agreed that as the policy developed the language used must be clear and the policy must be presented in an ‘understandable’ format. The Scottish Government confirmed that language would be taken into account as part of the development of the benefit, including during testing of the process with people who had experience of the current system.

Policy Options for the Funeral Expense Assistance

4. Lucy Carmichael provided an overview of the process involved in developing the five policy options that the group would consider during the meeting. It was highlighted that these policy options had been shaped by feedback received through the Social Security consultation, previous Round Table discussions, and the Funeral Poverty Conference.

5. It was highlighted that whilst policy elements had been grouped in the option models brought for consideration, these should not be considered in isolation and that a elements from each option could be combined to create the most appropriate system.

6. It was noted that decision on the development of FEA would need to be taken within the wider context of the pressure on finances across the whole of the public sector in Scotland.

Option 1

7. Lucy Carmichael provided an overview of Option 1 highlighting that this option would be less costly and carried less risk than the other options. This option included the commitment to 10 day processing, enhanced pre claim support, extension of the application window to six months and a flat rate for payment of additional funeral expenses (currently set at £700).

8. In discussion the following points were raised:

• The 10 day processing time commitment was welcomed by group members;

• The group generally supported the extension of the application window;

• The group agreed that this option would provide a marginal improvement on the current model; and

• The group also requested clarity regarding the pre-claim support, specifically the ability to include an ‘online calculator’. Lucy explained the SG were looking at different models for applicants to apply and this may include an online process, however, it was not possible to confirm at this stage if a calculator would be included.

Option 2

9. Lucy Carmichael provided an overview of Option 2 noting that it included all changes made in Option 1 and also included a revised approach to identifying the nearest relative which was expected to make the system clearer and reduce the number of intrusive questions asked. Two alternatives for reducing the complexity of the hierarchy were provided. The first involved allowing anyone on the same level of the hierarchy to apply if they are in receipt of qualifying benefits. The second involved creating a pool of eligible people, any of whom could apply if they were in receipt of qualifying benefits.

10. The following points were made in discussion:

• Concerns were raised that having a family pool of possible applicants might increase spend, drive behaviour, and potentially open the system to fraud. It was suggested that there would also be a potential additional administrative burden due to be checks to ensure that multiple people within the same family pool did not claim for the same funeral;

• Action would still have to be taken to address any intrusive questions around family structures. The group noted the Agency would have improved pre-claim support;

• The analysis was based upon a 60% take up rate, and retaining the same passporting benefits;

• Under the DWP’s current system for processing of the Funeral Payment within the context of the deceased’s estate even small amounts of money left by the deceased would be deducted from the final calculation of the award to be made. The overall amount recovered from the estate of the deceased by the DWP is low as a proportion of expenditure on the Funeral Payment (£0.1 million);

• The option did not address the level of payment and that the payment had been capped for over a decade. It also did not address whether regular uprating based would be implemented. The group noted that methods of uprating such as CPI or RPI might not reflect the increase in costs of a funeral;

• The current average costs of funerals were discussed and it was noted that there was a large gap between the average cost of a funeral and the level of payment. The group was supportive of an increase in the payment amount for the capped element and of regular uprating. It was noted that the additional expenditure required for an increase to the capped amount would vary depending on what other changes were being made to the benefit; and

• While it was often stated the £700 cap on additional expenses had been in place since 2003, it was stated that actual this cap had been set under the previous benefit and so had been in place for longer than this.

Option 3

11. Lucy Carmichael provided an overview of Option 3 noting that it included a flat rate award for the whole benefit, a Decision in Principle (DIP) and the introduction of an initial payment to cover a deposit. It was suggested this option would simplify eligibility and make communication of how the benefit operated easier to understand. This, in turn, could provide reassurance to applicants when making choices regarding a funeral on the amount of the payment and whether they were likely to be eligible.

12. The following points were made in discussion

• Some members of the group highlighted that a flat rate payment could be beneficial despite the regional variations in costs as it would reinforce the issue of client choice when purchasing a funeral service;

• At the current level of Funeral Payment (or even with a modest uprating) there would still be an impact on the regional variation of costs across Local Authority areas, creating both winners and losers. This regional variation could potentially reduce the choice between burial and cremation depending on the costs within each area;

• A flat rate payment could provide significant clarity for the applicant on what they would receive if they were successful, allowing them to take decisions on that basis. It would also be potentially quicker to process applications;

• The Scottish Government confirmed that it was expected that Agency would look to deliver clear communications to applicants on eligibility regardless of the final model chosen, and suggested a flat rate payment would not be the only way to improve clarity for the applicant;

• A flat rate payment may become more desirable in the longer term following development of statutory guidance under the Burial and Cremation (Scotland) Act 2016 s98 on the ‘Funeral Costs’ for Local Authorities, although there was no power to cap Local Authority costs.

• There were risks around taking a DIP that incorrect decisions could be made due to a change in the applicants circumstances and the impact that reversing any decisions would have on the applicant;

• In order to be confident in making a robust decision that would not be reversed, a DIP would require significant evidencing which may result in a DIP not being provided much faster than the existing 10 day processing commitment. As a result this would potentially double administration requirements and therefore increase costs;

• A significant improvement in the information available to applicants would be required in order to remove the need for DIP, to help inform their choices at the point of purchasing a funeral service; and

• Improved information about who would be eligible would also need to be made available to funeral directors to help them advise clients at the point of purchase. It was suggested this was a significant issue for funeral directors at present.

Option 4

13. Lucy Carmichael provided an overview of Option 4 noting that this would anchor eligibility on the status of the deceased prior to death which would be a fundamental change compared to the current system. This option carried a significantly higher level of risk than the other options and was expected to be considerably more expensive as it widened eligibility the most. However, it would be easier to communicate the eligibility requirements and it would avoid having to negotiate complex family circumstances.

14. The following points were raised in discussion:

• Linking eligibility to the circumstances of the deceased could create longer term behavioural change as individuals may decide not to save for their own funerals and therefore increase the costs of the benefit;

• Families of the deceased might not be aware if the deceased was on a qualifying benefit;

• Funding might not being targeted to those who need it most because relatives of a someone on benefits might not necessarily be in poverty.

• Some group members expressed their support for this proposal because of the increase in single person households, or because it more accurately reflected Scots Law by placing the responsibility with the deceased’s estate and not with the family. Other group members felt the risks outweighed the benefits at present, and that the SG could look at this option in more detail as a longer term measure once better information is available on how to target the benefit.

Option 5

15. Lucy presented a final option of introducing Council Tax Reduction as a qualifying criterion. This could potentially be included under any of the options – with a varying level of cost. It was noted that the addition of CTR had been suggested by a small number of consultation responses as it would recognise the potential disparity between applicants who are owner occupiers and in receipt of CTR and applicants who are in rented accommodation and in receipt of Housing Benefit.

16. The following points were raised regarding this option:

• Some group members noted that this option may reduce the targeting of resources. However, others suggested that inclusion of CTR would be a way to support low income families.

Round Up & Next Steps

17. The group noted that all of these models had been developed using the best available data, and the next steps are to provide advice to the Minister on the recommended model. It was also noted that the spending review was underway.

18. Lucy asked the group to consider prioritising the policy elements that had been presented. The following points were made in discussion:

• Activity to increase the take up rate of the FP now would help to address the level of funding being transferred to the Scottish Government at the point where FEA would launch. The group noted the work the SG were currently undertaking in relation to the ‘take up’ campaign, and it was noted that it would be helpful to inform funeral directors across the UK of the campaign in order to have a significant impact on resources available;

• Certain funerals for faith reasons, such as Islamic burials, have to occur as soon as possible after death and the clarity of option 4 along with the improvements noted at option 1 could help in this regard;

• A number of the group supported option 4 but recognised that extending eligibility to this volume of applicants may be unaffordable and could reduce targeting;

• Some group members indicated that while they had originally preferred option 4 and an overall flat rate payment, on further consideration it appeared that these were too risky at present.

• The group generally considered that a DIP could be helpful to applicants to make informed choice;

• A number of the group also supported a flat rate payment with some suggesting that increased competition over time would reduce variation in the cost of funerals.;

• There was overall support for increasing the payment significantly to meet the ‘real cost’ of a funeral and for regular uprating in the future. It was recognised that there would be a trade of between increasing the payments amount and widening eligibility for the payment;

• It was suggested that there could be better joining up with other public services, particularly with the NHS around provision of support;

• Some members of the group continued to express a preference for widening eligibility to include CTR, while others were less supportive of this measure; and

• For some a pressing concern was that of enhanced support and advice associated with the new payment. A number of members of the group emphasised the need for clear and accessible information to allow applicants to make an informed choice at the point of arranging a funeral.