Paul Lewis Each year thousands of bereaved spouses who could get financial help simply do not claim. The benefits are not means-tested and are paid for by the National Insurance (NI) contributions of the person who has died. They have to be claimed within strict time limits, so it is important to claim as soon as possible. These benefits are given to couples who are married or in a civil partnership – but not to those who merely lived together.
Bereavement payment
This is a one-off grant of £2,000 to the bereaved spouse or civil partner. It is tax-free and does not affect entitlement to any means-tested benefits. It normally has to be claimed within 12 months of the death. The deceased must have paid full NI contributions in at least one year of their working life.
However, another condition means many older widows (I use the word to include widowers and civil partners) do not get the payment if the bereaved person is over pension age AND the person who died was getting a retirement pension. But it is paid to people widowed over pension age whose spouse did not claim retirement pension. That includes a spouse over pension age who was deferring their claim.
Bereavement Payment has to be claimed within 12 months of the death. However, since October 30, 2008 people who get the state pension do not have to claim – it should be paid automatically after the death is reported. And between September 24, 2007 and October 30, 2008 there was no need for a claim to be made by anyone over pension age. So if you did not get the payment then it may still be possible to claim it. But you will only be eligible if your spouse was not claiming retirement pension.
Bereavement allowance
Any widow aged 45 to pension age when their spouse dies may be able to get a Bereavement Allowance paid for 52 weeks. The allowance depends on the widow’s age when their spouse dies.
The allowance is not means-tested but is taxable. For women widowed before April 9, 2001 a similar benefit, Widow's Allowance, lasted until pension age. Some women widowed at that time still get it.
Widowed parent's allowance
If you have a dependent child under 19 and you are under state pension age you may qualify for this allowance. It is £95.25 a week and, in addition, there may be an earnings-related element based on your late spouse’s earnings. Extra amounts for children were abolished for new claims made since April 2003. Instead, you continue to claim for child tax credits. If your income is less since your spouse’s death, tax credits may go up. So make sure you let the Tax Credit office know of your changed circumstances.
Conditions
Bereavement Allowance and Widowed Parent's Allowance have to be claimed and are backdated up to three months. If you claim later, you will lose the allowance for earlier weeks. Both allowances may be reduced if the deceased had not paid full NI contributions for most of their working life.
These benefits are for widows, widowers and bereaved civil partners so people who were divorced or whose civil partnership was dissolved at the time of death will not be entitled. If after your spouse's death you live with someone as if you were married, then these allowances will stop for as long as you do that.
Claiming
You can download the claim pack for all the benefits at www.dwp.gov.uk/advisers/claimforms/bb1_print.pdf or get one from your local Jobcentre Plus. In either case, the completed form has to be taken or sent to the Jobcentre Plus office. Always keep a copy of the form and any documents enclosed with it. You will need either the death certificate or an interim death certificate issued by a coroner if your spouse's death was the result of an accident or for any reason there is an inquest. Many coroners do not give information on claiming bereavement benefits. But you can claim using the interim certificate before any inquest is complete.
Inheriting state pension
A spouse or civil partner may be able to inherit some of their late spouse’s state pension, whether either or both of them are above or below pension age at the time of the death. However, until April 2010 the rules for widows differ from others.
A widow who has not paid enough NI to get a full pension can use her late husband’s contributions to increase it. And she can inherit half his graduated retirement pension (paid on earnings between 1961 and 1975). If he had deferred claiming his state pension, she can get the increase in his basic state pension.
She can also get some or all of the extra he earned on his graduated and earnings-related pension, or take the increases as a lump sum. And a widow can inherit between 50 and 100 per cent of the additional earnings-related state pension – SERPS, or State Second Pension.
If she is under state pension age she loses all these rights if she remarries before reaching pension age – but not if she cohabits.
From April 2010 these rules will also apply to widowers and to civil partners. For deaths before April 6, 2010 the rules about using contributions and inheriting graduated and extra pension are more restrictive for them. However, they can inherit SERPS and State Second Pension before that date subject to the remarriage rule.
State pension age
Men reach it at 65 and women at 60. From April 6, 2010 the age for women will begin to increase. It will reach 65 for women from April 6, 2020, and increase further for men and women, starting in 2024 and reaching 68 by 2046. Check your pension age at www.thepensionservice.gov.uk/state-pension/age-calculator.asp
Written by Paul Lewis, this article was first published in the August 2009 edition of Saga Magazine. The author's opinions are his own and for general information only. Always seek independent financial advice.