Bereavement support for people whose spouse or civil partner dies will be reformed this April, with some families losing out on as much as £12,000.
At the start of the next tax year, the Bereavement Payment, Widowed Parent’s Allowance and Bereavement Allowance – or just “Bereavement Support” in April – lump-sum payment given to a surviving partner will be increased from £2,000 to £2,500 for those with no children, and to £3,500 for those with children.
Under the old system, this would be followed by a weekly taxable Widowed Parent’s Allowance of up to £112.55 per week, paid until the youngest child no longer qualifies for child benefit, the surviving partner moves in with a new partner, or until they reach the state pension age.
Those aged between 45 and the state pension age without children would receive taxable Bereavement Allowance of up to £112.55 for a maximum of 52 weeks.
Both payments are linked to the National Insurance record of the deceased partner.
In April, these payments will be revised to a monthly £100 tax-free allowance if you don’t have children and £350 if you do, lasting a total of 18 months regardless of your age or living situation.
It means that childless widows – in particular, those under the age of 45 – will get an extra £2,300 tax-free.
But those with children – who would ordinarily receive allowance payments for up to 20 years – could miss out on up £12,000 of allowance.
The Department for Work and Pensions (DWO) estimates that around 75 per cent of families will lose out because of this change.
A DWP spokesperson said: “The old system, introduced more than 90 years ago, was based on the outdated assumption that a widowed parent relied on their spouse for income, and would never work themselves.
“This doesn’t reflect people’s lives today.
“The new Bereavement Support Payment restores fairness to the system and focuses support during the 18-month period after a loved one dies, when they need it the most.
“It will be easier to claim, won’t be taxed and will be subject to a disregard for benefit claims, helping those on the lowest incomes the most.”