Funeral Expense Assistance regulations: our response to consultation

Response to the Consultation – Additional information on selected questions

18. This section gives additional information on the Scottish Government’s response, listed by consultation question.

Question 1 - Will the draft regulations meet the policy intent.

19. FEA is one of 10 actions that the Scottish Government will take this parliamentary term to tackle funeral poverty. Through FEA the Scottish Government will provide financial support to individuals on certain low income benefits who are responsible for the funeral costs; reducing the burden of debt that they may face. We have widened eligibility by 40% compared to the current payment, to provide support to more people who are likely to struggle with funeral costs.

20. Other key improvements to FEA compared to the current payment include:

• Annual uprating of the flat rate element of the payment to take account of the impact of inflation;
• A new assessment process to determine who is responsible for the funeral. This will help people understand if they are entitled, reduce intrusive questions and assist in our work to increase take-up so that people receive the support they are entitled to; and
• Introducing a 10 working day processing time for completed applications, with payment as soon as practicable thereafter.

21. The FEA support is part of achieving the Scottish Government’s National Outcomes and will specifically contribute towards the following:

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

22. The FEA regulations do not make any provision in relation to the charge-setting process for cemeteries, crematoriums, funeral directors, and any other businesses that may be used by someone arranging a funeral. However, another action in the Funeral Costs Plan is to develop guidance on funeral costs and we ran a consultation on draft guidance in 2018^[9]. This draft guidance sets out steps that burial authorities, cremation authorities and funeral directors can take to improve transparency and availability of funeral pricing information. These steps are designed to help consumers to understand the costs associated with making arrangements for a funeral and choose the right option for them.

23. Any action taken by a burial or cremation authority in Scotland in delivering the funeral of an 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 relevant regulatory requirements. FEA will have no impact on this.

Question 5 – New ‘nearest relationship test’ to the person who has died.

24. We have heard from people who have been bereaved about the stress that is caused by the complex eligibility criteria and application process for the current payment. To make this process less intrusive, to avoid having to make judgements about family relationships and to make it clearer in advance who is entitled to FEA, the Scottish Government has decided to use the family hierarchy lists from the Burial and Cremation (Scotland) Act 2016 s65 and 66 as part of the process to determine eligibility for FEA.

25. In addition to using the family relationship lists, a key difference from the current DWP Funeral Payment process is that if there was another family member at the same level of the list as the applicant such as another sibling, and nobody at a higher level of the hierarchy, we will 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 will accept that the applicant is an appropriate person to take financial responsibility for the funeral.

26. Based on feedback from our research with people with experience of the present system, we have changed our policy so that if the nearest relative of the person who has died is 16 or 17 years old they will be removed from the hierarchy for FEA, unless they explicitly request to take responsibility for the funeral. We have done this for several reasons; at 16 and 17 years old they will be at the start of their career or still in education, they are likely to struggle to pay for a funeral and are less likely to be prepared to arrange a funeral. In addition, it is unlikely 16 or 17 years olds would be able to enter into a contract with a funeral director. Removing these young people from the hierarchy will potentially allow other family members to receive an FEA payment.

27. We recognise the need to have a level of flexibility to accommodate complex family relationships such as the exceptional circumstances of estrangement, or where there are relevant circumstances the applicant raises in their application. Social Security Scotland will then consider whether it is reasonable for the applicant to be the person making funeral arrangements. Guidance will be available for both client advisors and clients on this process.

28. The improved transparency of the new nearest relative test will ensure that we will reach more people with this benefit and will allow us to streamline the application process.

Question 6 – Residence.

29. Though the consultation findings stated broad support for the residency model set out in the draft regulations, we have listened carefully to the concerns that were expressed and have decided to modify our approach to make the process simpler and more accessible.

30. Applicants on a qualifying benefit, or whose partner is on a qualifying benefit, will usually have demonstrated habitual residence in the Common Travel Area and will simply require to show that they are ordinarily resident in Scotland. Ordinary residence is defined as the place where a person chooses to live for a settled purpose, even if that purpose is for a relatively short period. It is therefore simpler to administrate than habitual residence and will require claimants to provide a lower, more straightforward, standard of proof. This approach also allows Social Security Scotland to rely more heavily on the information it will already possess through access to DWP systems, again reducing the burden on applicants. In practice, this means that many applicants will be asked for little more than simple proof of address, as opposed to the more difficult and sometimes intrusive habitual residence test applied by DWP for low income benefits.

31. We have also chosen not to replicate the elements of DWP’s European Economic Area right to reside test for low income benefits that serves to exclude from eligibility certain categories of EU nationals e.g. the economically inactive.

32. There is a close intersection between social security residence conditions and the immigration rules, reserved to the UK Government, that restrict access to public funds. Our policy intention is to be as generous as possible but without extending assistance to people whose ability to live and work in the UK could be jeopardised through receipt of public funds forbidden by their immigration status.

Question 8 – Is the qualifying benefit / tax credit eligibility clear?

33. Discussions with stakeholders and the consultation process have identified a number of groups who could be prioritised in FEA eligibility. We have sought to design the eligibility criteria for the FEA so that it reaches as many of these groups as possible. At the same time, in certain cases, we have decided not to change eligibility because it would reduce the focus of FEA on people who are on lower incomes and add a disproportionate amount of cost and complexity to processing. Details are set out below.

34. Support for Mortgage Interest (SMI) - SMI provides support for home owners to prevent repossession of their home. As of April 2018, SMI payments are no longer a benefit payment but instead a loan secured against the applicant’s property. At the same time DWP made a change to eligibility for its FEP (and Sure Start Maternity Grant) to include SMI payments for applicants who are in receipt of no other qualifying benefit. Most SMI recipients will also be on a FEA qualifying benefit. However, it is possible for some individuals to be eligible for an SMI loan even if they have been refused all other qualifying benefits because their income is too high. This suggests that people in receipt of SMI only may be relatively better off than individuals eligible for FEA. On that basis, receipt of SMI alone as a qualifying criterion is not considered to help with targeting resources at those most in need. In addition, our analysis suggests that including SMI only as a qualifying benefit is unlikely to assist more than a handful of people in Scotland annually and so would and add a disproportionate amount of cost and complexity to processing.

35. Maternity Allowance (MA) - MA is paid to people who cannot get statutory maternity pay. Recipients may be employed, self-employed or have recently stopped working. The number of people who receive MA and no other qualifying benefit is expected to be low, almost all will qualify for FEA by another route. MA is not means tested and income of spouses and partners is not taken in to account, so including MA is likely to extend FEA eligibility to people on higher incomes and undermine the principle that FEA is primarily an intervention for people on low incomes. Adding a test to ensure that an MA recipient is on a low income or does not have a partner would increase administrative complexity and would be disproportionate to the numbers affected. We have therefore decided not to include MA as a qualifying criterion for FEA.

36. Council Tax Reduction (CTR) as a qualifying criterion - CTR is interlinked with UK benefits, in particular housing benefit and therefore has limited additional impact as a qualifying benefit, capturing a very small number of additional people. It is not a consistent proxy for low income. We have therefore decided not to include CTR as a qualifying criterion for FEA.

37. Students - Students who are aged 16 or 17 and are the nearest relative of the person who has died will be removed from the hierarchy for FEA, unless they explicitly request that they want to take responsibility for the funeral. Removing these young people from the hierarchy will potentially allow other family members to receive an FEA payment. Other students who are 18 years or over will need to be on a qualifying benefit in order to be eligible. Separate provision for students has the potential to complicate FEA processing significantly in particular around residence requirements. We therefore decided not to make separate provision for students in the eligibility for FEA.

Scottish Government

18 January 2019