Funeral Payment and Funeral Poverty Reference Group minutes: May 2017

Attendees and apologies

Attendees

• Lucy Carmichael, Low Income Benefits Policy Unit, Scottish Government – Chair
• Mohammad Ali, Muslim Council of Scotland
• Gerry Boyle, Dignity
• Paul Cuthell, NAFD
• Michael Davidson, Scottish Government
• Nicola Dickie, COSLA
• Keith Dryburgh, CAS
• Carl English, Quaker Social Action
• Meg Fowler, Scottish Government
• Jamie Gregory, Low Income Benefits Policy Unit, Scottish Government
• Collette Hughes, Scottish Government
• Karen Hurst, Association of British Credit Unions
• Rose Jackson, Scottish Pensioners Forum
• Catherine McKenna, Low Income Benefits Policy Unit, Scottish Government
• Richard Meade, Marie Curie
• Caroline Pretty, NHS Lothian

Apologies

• Clare Tucker, NHS Health Scotland
• Garrick Smyth, COSLA
• Glenda Watt, SOPA
• Mark Willis, CPAG

Items and actions

Chair – Welcome and Introductions

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

Minutes of Previous Meeting

2. The Minutes from the Reference Group meeting on 31 January 2017 were agreed but it was noted that these would also need to be agreed by the other stakeholder meeting which was due to take place in June.

General Update on Progress Developing Scottish Social Security System

3. 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 had recently made a statement in Parliament about the Social Security Agency. It was noted that the Social Security Bill would be introduced before summer recess.

Policy Options for the Funeral Payment

4. Lucy Carmichael provided an overview of the process involved in developing the five policy options that the group would consider during the meeting. 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 decisions on the development of the new benefit 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 carried less risk than the other options and was one of the options that had lower cost implications. 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 extension of the application window was welcomed. Group members highlighted that benefit claimants often missed the application deadline because they were unaware of the payment.

• The 10 day processing time commitment was welcomed, with group members highlighting problems with the current DWP Funeral Payment application process such as lost application forms, complex hierarchies of responsibility and unclear eligibility resulting in delays;

• It was highlighted that Option 1 did not address the amount of the payment which was a key issue for many in the group. The additional expenses element of the payment had been capped for over a decade and there was general support for uprating based upon inflation. It was noted that the method of any uprating would need to be considered in more detail at as CPI or RPI might not reflect the increase in costs of a funeral;

• The current average cost of a funeral was discussed and it was noted that there was a large discrepancy between the cost of a funeral and the level of payment. Members of the group stated that it would be disappointing if there was not fundamental change to address this difference. 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.

• It was noted that there had been a general increase in the number of local authority funerals (though these only accounted for 1% of all funerals in Scotland) and it should be considered whether the new system would help this situation;

• There were discussions about the method of modelling used to calculate expenditure implications of the option and it was noted that uptake numbers were not just based upon death rates but also on declining eligibility for qualifying benefits;

• The group generally agreed that contributions from family and friends should not be deducted from any payment. This would disincentive people from accepting help from friends and family and may result in them taking on high risk loans instead. It was highlighted that it is very unusual within a social security system when making benefit payments to take into account voluntary contributions;

• It was noted that it is difficult to model the cost of disregarding friends and family contributions due to a lack of data and that this meant that any change in this area carried a level of risk in terms of assessing its impact; and

• The group highlighted the importance of knowing the reasons why people were having their claims rejected. However, it was noted that the reasons for rejection are complex and that it is difficult to understand these reasons under the current DWP system. It was suggested that ‘Down to Earth’ had data on this and that it found that the main reasons were that other members of the family are not on qualifying benefits or the claimant themselves is not.

Action 1: Quaker Social Action agreed to provide some case examples to the SG.

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, based on the hierarchy in the Burial and Cremation (Scotland) Act 2016. 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:

• The group highlighted that there could be tensions between the complexity of the hierarchy and the commitment to a 10 day processing timeframe;

• There were concerns that having a pool of possible applicants may increase spend and also drive behaviour. Some of the group were concerned that other family members who were not on qualifying benefits might pressurise those that are on qualifying benefits to take responsibility for a funeral;

• There were concerns that the family pool model would add to the administrative burden as there would need to be checks to ensure that multiple people did not claim for the same funeral;

• It was highlighted that the family pool model would differ from the hierarchy of who can organise a funeral in the Burial and Cremation (Scotland) Act 2016. Use of the hierarchy in this Act had been suggested by a number of stakeholders in response to the recent consultation.;

• The group noted the difficulties of proving relationships between individuals, and whether payments from a friend or family was a gift or a loan. Therefore there would be trade-offs in balancing administrative burden, stopping fraud and ensuring dignity and respect within the system;

• There were concerns that the family pool option would double the number of payments which would significantly increase the cost but that it might lead to payments being less targeted on those in poverty. However it was noted that this option was modelled at having the joint lowest unit cost to administer; and

• It was noted that this model was based upon a 60% take up rate, though there are challenges estimating this in part due to the complex eligibility hierarchy.

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 much 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

• It would be very difficult to have a single flat rate of payment when the Local Authority charges varied so considerably, though work was underway to understand variability of charging across local authorities. This variability would inevitable result in some people doing better from the change while others would be worse off;

• It was suggested that a DIP was worth exploring as it would give people reassurance that they would receive support and therefore feel more able to plan a funeral. There was acknowledgement that an incorrect DIP decision could be distressing and more difficult than the uncertainty under the present system. There could also be issues around a decision DIP in cases of terminal illness due to potential need to reassess and change of circumstances of the person determined responsible for the funeral.

• It was suggested that in order to be effective a DIP had to be provided very quickly. However, taking a DIP with a sufficient level of confidence this would not be reversed later in the process would require evidencing which may result in a DIP not being provided much faster than the more general 10 day processing commitment. It was noted that this would potentially double administration requirements and therefore increase costs;

• Local Authorities s had tried to take DIPs for Housing Benefit decisions and this had proved to be very difficult in practice;

• It was highlighted that deposit payments would reduce the risk of bad debt for funeral directors;

• It was suggested that Local Authority costs should be paid directly from the funeral payment;

• The average length of time between death and a funeral is 7 days and therefore members discussed whether a deposit system would help;

• Even within the current flat rate for local authority costs the DWP consider what is a reasonable cost. An example was given that the DWP may not pay for a funeral at more expensive times of day if cheaper alternatives were available;

• It was noted that Islamic burials, which have to occur as soon as possible after death, may not be assisted by the introduction of a deposit payment; and

• Standardisation of both Local Authority and funeral director costs was suggested, however, other members of the group highlighted that funeral directors costs vary depending on their geographical location and the facilities that they offer. In addition, it was noted that choice in funeral provision was important and that any attempt to standardise prices could be considered to be price fixing.

Action 2: The Scottish Government and the Muslim Council of Scotland to meet to discuss particular requirements of Islamic funerals.

Option 4

10. 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 result in a higher level of expenditure as it widened eligibility the most. However, it could be easier to communicate the eligibility requirements and it would avoid having to negotiate complex family circumstances.

11. The following matters were raised regarding Option 4:

• There was some support for this proposal within the group and it was highlighted that there is often a misconception that the current system is based upon the deceased and not the claimant;

• The family of the deceased might not be aware of the deceased financial circumstances and therefore their benefit entitlement because the current older generation often consider their financial affairs a private matter;

• There were concerns that this option would result in funding not being targeted to those who need it most because relatives of a someone on benefits might not necessarily be in poverty;

• There were concerns that this option wouldn’t encourage people to save for their own funeral, however, other members thought that it would enable people to think about their own preparations and not their families;

• It was suggested that this option would be very similar to the Death Grant and there was little fraud in relation to that grant; and

• Some members whilst initially keen on this option later expressed concerns that when you look at the details there are flaws.

Option 5 – Council Tax as qualifying criteria

12. Lucy Carmichael presented a final option of introducing Council Tax Reduction as a qualifying criterion noting that it had been suggested by a small number of consultation respondents.

13. The following matters were raised regarding this Option:

• Adding Council Tax Reductions as a qualifying benefit would give greater control over eligibility to the Scottish Government as Council Tax Reduction is devolved. This should be a consideration as Housing Benefit becomes obsolete under Universal Credit which is not being devolved (though some flexibilities are); and

• It might assist people who were working but still in poverty.

Overall

14. There was general support for greater pre application support and improvement of application channels and that this should include both phone and online support.

15. Members highlighted the importance of viewing this work in the wider context of action on funeral poverty.

Next meeting

16. The next full reference group meeting was expected to be arranged in early autumn, though another meeting to cover the five options with those who had been unable to attend that day would take place in June.