Funeral Expense Assistance regulations: consultation

Section 5 - FEA Regulations

Eligibility

Eligibility for FEA will be determined when a completed application is received by Social Security Scotland and will look at:

• Applications: whether the application is made in the format required and during the permitted application window.
• Relationship to the person who has died and financial responsibility for the funeral: to be eligible, the person applying for FEA must be responsible for paying for the funeral, and is usually the nearest relative or friend of the person who has died.
• Residence: applicant needs to be habitually resident in Scotland, and the deceased needs to have been ordinarily resident within the UK.
• Qualifying benefit: the applicant or their partner needs to be in receipt of a qualifying benefit or tax credit.

The sections below give more detail on each of these:

Applications

The aim is to make it as easy as possible for people who are entitled to FEA to take up their entitlement, so there will be a number of ways to apply for FEA. Information on how to apply for devolved benefits will be publicised widely.

The application window for FEA opens on the date of death of the person whose funeral is being arranged and closes six months after the date of the funeral. An FEA application can be made at any point during this window. Consideration was given to whether having flexibility to accept applications outside this window would be helpful in exceptional circumstances. While this may allow more people to apply, it would add a subjective, and potentially inconsistent element to decision making, which is at odds with an entitlements based system. On balance, the Scottish Government has decided that it is better to have a clearly defined application window.

In the event of an individual applying because they are expecting to have responsibility for a funeral but the person has not yet died, the applicant would be informed of the application process and evidence required. Applications submitted for a funeral where the person has not yet died would not be valid, as circumstances and eligibility may change prior to the application window commencing.

Timescale to make a determination: The Scottish Government has committed to processing FEA applications in ten working days and making payment as soon as practicable thereafter. This is significantly faster than the current DWP processing time and responds to concerns we have had that it takes too long to make decisions at present, increasing the uncertainty and stress for applicants.

Date of Application: Applications will be assessed based on the eligibility of the applicant on a single day. The application is treated as being made on the day it is received by Social Security Scotland.

Valid Application: There will be certain conditions that need to be met to determine that a valid claim has been made. Relevant processes for this and for situations where the form does not meet the requirements, will be set out in guidance once we have further developed the process to deliver our services.

Evidence: Evidence requirements and processes to check whether applicants meet eligibility conditions are under development. This includes opportunities for using existing data sources, including gathering data from DWP and HM Revenue & Customs ( HMRC). Social Security Scotland's evidence requirements will be kept to a minimum and will be clearly specified.

Policy development so far: Initially the Social Security Bill specified that only one application could be made by an individual for FEA. Due to the length of the FEA application window, an individual's eligibility may change depending on when they apply. We understand that not everyone who is entitled to be on a qualifying benefit or tax credit may be in receipt of one at the point they apply for support. Also, people may not become eligible for a benefit until after someone has died and this leads to a change in their financial circumstances.

What we will do to improve things: In recognition that an individual's circumstances can change during the application window, the Social Security (Scotland) Bill 2018 was amended at Stage 2 of the Bill process to allow repeat applications from the same individual for the same life event. Once we have further developed the process to deliver our services, there may be some further provision in regulations and operating practice in this area to smooth the application process for applicants and increase efficiency. For example, it may be possible to make exceptions for the situation where a backdated award of a qualifying benefit has been made after the date of the FEA application window has passed.

4. Is the application window for FEA clear?
Yes / No
If no, please explain:

Relationship to the deceased

Eligibility for FEA will, in part, depend on the familial relationship or friendship that the applicant had with the person who has died.

Policy development so far: We understand the current DWP system asks questions that are intrusive and distressing. The questions also extend the length of the Funeral Payment application form, and ask about things where applicants may not have access to the information required, such as the financial status of other family members. For example, if there is another immediate family member not on a qualifying benefit then the DWP would seek further information from the applicant about that family member. This would not only delay a decision being made while the applicant gathers further evidence from other family members, but is also likely to mean that the applicant would not be eligible to receive the payment as the DWP would conclude that there is another person who could take financial responsibility for the funeral.

What we will do to improve things: The Scottish Government has been looking at ways 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 responded to feedback from stakeholders and has decided to use the family hierarchy lists from the Burial and Cremation (Scotland) Act 2016 (2016 Act) as part of the process to determine eligibility for FEA. The lists are as follows:

Adult death:	Child death:
the adult's spouse or civil partner,	the child's parent or a person who had parental rights and parental responsibilities in relation to the child (but who is not a local authority),
neither married to nor in a civil partnership with the adult but was living with the adult as if they were married to each other and had been so living for a period of at least 6 months (or if the adult was in hospital immediately before death had been so living for such period when the adult was admitted to hospital),	the child's brother or sister,
the adult's child,	the child's grandparent,
the adult's parent,	the child's uncle or aunt,
the adult's brother or sister,	the child's cousin,
the adult's grandparent,	the child's niece or nephew,
the adult's grandchild,	a friend of long standing of the child.
the adult's uncle or aunt,
the adult's cousin,
the adult's niece or nephew,
a friend of long standing of the adult.

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.

In exceptional circumstances, such as where there has been estrangement, or there are relevant circumstances the applicant raises in their application, Social Security Scotland will consider whether it is reasonable for the applicant to be the person making funeral arrangements.

Our forecast suggests that making these changes will significantly widen eligibility for FEA, with an estimated additional 2,000 FEA payments being made each year. This will extend FEA support to more people on low incomes, taking the total number of payments to approximately 5,600 per annum, once a steady state is reached. In addition to the £5.3 million we will receive from the block grant transfer from the UK Government, the Scottish Government is investing a further £3 million annually to fund this widened eligibility.

5. We have proposed that the applicant must usually have the nearest relationship to the person who has died, and in exceptional family circumstances, such as estrangement, that they explain to Social Security Scotland why they should be considered to be the appropriate person who will take financial responsibility for the funeral.

Do you agree with this approach?
Yes / No
If no, please explain:

Residence

There are two residency considerations for FEA:

• Residency of Applicant: an FEA applicant must be habitually resident in Scotland.
• Residency of Person who has died: the deceased person must have been ordinarily resident in the UK.

The position adopted in relation to the residency of the applicant and of the person who has died is consistent with the current UK system. This is important and mitigates the risk of double claiming and / or gaps in entitlement. It will prevent people who happen to be in Scotland on a particular day or for a short period from being entitled to benefits (for example, if they have a second home or are on a long holiday). Since a person can only be habitually resident in one place at a time, it prevents applicants from qualifying for assistance from multiple jurisdictions.

Habitual residence: Broadly, this would mean that to be eligible an applicant's main home must be in Scotland and their intention is to continue living there. They must also be entitled to be living in Scotland. In practice, the residence conditions attached to each of the qualifying benefits or tax credits may be sufficient to establish Scottish residence. This, combined with the Scottish Government's shared work with DWP to make the systems as seamless as possible, means that we do not anticipate a significant evidence burden on applicants, especially where they are coming to Scotland from other Common Travel Area ( CTA) jurisdictions, in line with the reciprocal and pragmatic approach that is currently taken. Habitual residence is an established legal concept and is consistent with the eligibility conditions used in the UK system, throughout the CTA and in many member states of the European Union. Using habitual residence for FEA applicants therefore brings a number of advantages.

Ordinary residence: The other main concept of residence is ordinary residence. This is very similar to habitual residence in that it requires a person to be living in a jurisdiction and to have an intent to remain there. The key difference is that ordinary residence can be established even where the intent to remain is for a short or temporary purpose, meaning that a person could be ordinarily resident in one jurisdiction but habitually resident in another. While ordinary residence may be easier to administer, it is a less robust concept that may confer eligibility on applicants with relatively weak or temporary associations with Scotland. Its inconsistency with the approach taken in relation to the majority of UK assistance potentially also creates scope for administrative problems, including double claiming. However, while we do not consider that ordinary residence is a suitable test for FEA applicants, we consider that it is suitable for use for the residence of the person who has died, as it is not overly burdensome for the applicant to provide evidence on and is consistent with the UK Government position.

Policy development so far: Concerns about the definition of being habitually resident in Scotland, and how Social Security Scotland will implement that definition of residency in practice, have been raised. This includes how residency will be defined at a UK and EU level. For example, where individuals live in Scotland and work in England; and EU nationals living in Scotland. Situations where people may have moved to provide care for a family member who has then died have also been suggested as a type of complex residency case that might occur.

What we will do to improve things: We would welcome engagement with organisations and individuals on this issue and expect to consider the treatment of complex residency cases further as we progress the development processes to deliver our FEA service and as we develop guidance for Social Security Scotland's decision makers.

6. We have proposed that applicants must be habitually resident in Scotland, and the person who has died must be ordinarily resident in the UK to qualify.

Do you agree with this approach?
Yes/No
If no, please explain:

Location of Funeral

FEA will provide support for funerals that take place in the United Kingdom, or, in certain cases, in a member state of the EU, Iceland, Liechtenstein, Norway or Switzerland. The funeral may take place outside the UK where the applicant or their partner is resident in Scotland and is exercising particular freedom of movement rights, as set out in the draft regulations.

Policy development so far: It has been suggested that we should carefully consider the wording of the location of the funeral section, as this is a complex area.

What we will do to improve things: We have reviewed the wording of this section of the regulations and are confident it is consistent with current provision for the location of the funeral.

Qualifying Benefits

Rather than creating a potentially complex new means-testing system, FEA payments will be made to applicants where either they or their partner have been awarded:

• Income Support ( IS)
• Income based Job Seekers Allowance ( JSA)
• Income related Employment and Support Allowance ( ESA)
• Pension Credit ( PC)
• Child Tax Credit ( CTC)
• Disability or severe disability element of Working Tax Credit
• Universal Credit ( UC)
• Housing Benefit ( HB)

This is expected to target FEA payments at people at the lower end of the income spectrum. This is consistent with the qualifying benefits and tax credits under the current system.

Support for Mortgage Interest

Policy development so far: The DWP recently added receipt of Support for Mortgage Interest ( SMI) only to its qualifying criteria for the Funeral Payment. It is not yet clear the number of people in Scotland who might qualify through this route alone.

What we will do to improve things: We are currently working with DWP to understand the scale of this change for eligibility in Scotland and how we might be able to design a system that would work to process applications from this group. We will progress this work over the summer before reaching a decision on whether to include receipt of SMI only in eligibility for FEA.

Widening eligibility to include other groups

Policy development so far: Other ways to widen eligibility for FEA have been considered, including receipt of Maternity Allowance, including pre-24 week pregnancy loss and people who are students. This would significantly increase the number of people who would be eligible for FEA.

What we will do to improve things: We have already widened FEA eligibility and expect to help an additional 2,000 people each year who would receive no support at present from DWP, as mentioned at page 10. Widening eligibility further to add these three additional groups has been analysed. However, we have concluded that the additional complexities, risks, and costs of widening eligibility outweigh the benefits of including these groups. We would also expect that if some of these changes were made, it would reduce the targeting of the benefit at those on low incomes. The Scottish Government has therefore decided not to widen eligibility for FEA to Maternity Allowance, pre-24 week pregnancy loss, and students.

Treatment of Universal Credit ( UC) fluctuating entitlement

The monthly variations in UC payment calculation and entitlement may mean that it is not clear to the applicant whether they are in receipt of UC at the time they apply for the FEA. We therefore plan to extend the eligibility test over two months. Due to the way that UC is administrated, around 6% of the caseload at any one time has an award of £0 because their earnings are too high to receive a payment. Scottish Ministers are minded to provide that people with a £0 award of UC should not receive a FEA.

7. We propose that qualification by being in receipt of UC should be an award of more than £0 in the month before or the month in which the application is made.

Do you agree with this approach?
Yes / No
If no please explain:

8. Is the qualifying benefit / tax credit eligibility clear?
Yes / No
If no please explain:

Assistance to Be Given

Payment

The FEA payment is made up of two elements, as set out below. We are reviewing if there is a clearer and more transparent way to communicate how this payment is calculated, to help people understand what support is available. This may include presenting the additional travel costs under the first element separately.

1) Burial or Cremation costs. This will be available to all eligible applicants, and may include costs of burial or cremation. It may also include the cost of any documents that are required to allow the burial and cremation to take place (such as a doctor's certificate). Some other costs may also be included in this element of the payment. This would include, for example, certain travel costs;

and

2) A flat rate payment, as a contribution for other expenses. This may be used towards any other funeral expenses such as funeral director fees, a coffin, and flowers. The amount of other expenses will either be –

• £700 for the majority of eligible applicants where the deceased had no funeral provision in place; or
• £120 to eligible applicants where the deceased had made provision for their funeral through a funeral plan.

The higher payment will apply in all cases where the person who has died was under 16 years.

Increasing the flat rate payment

Policy development so far: The £700 maximum currently paid by the DWP has been frozen since 2003. We understand there is a desire to increase this amount.

What we will do to improve things: The Scottish Government has committed to an annual uprating of the flat rate element. This will ensure that the value of this part of the payment will be protected from the impact of inflation. This commitment means that people in Scotland will receive a higher payment for other expenses than in the rest of the UK, in addition to more people being entitled to support. The costs of this additional support will be met from the Scottish Government's budget.

Removing the lower flat rate

Policy development so far: We have considered removing the £120 flat rate so all applicants are entitled to the upper payment.

What we will do to improve things: Removing this rate would mean that some applicants would receive the full £700 in addition to having almost all funeral costs paid for by a funeral plan. These applicants would be in a better position than applicants where the deceased had made provision for the funeral in ways other than a funeral plan (for example a bank savings account) as these savings would be deducted from the payment amount. This would create an unfairness in the system and so the Scottish Government has decided not to remove the lower flat rate.

Transport costs

The element of the current DWP Funeral Payment that pays for burial or cremation costs also includes some other costs, including transport in certain circumstances. Transport costs out with these specified circumstances fall under the other expenses (or flat rate) element of the payment.

Policy development so far: Entitlement to transport costs is complex and there is a lack of data about how it operates at present. The Scottish Government has considered options to simplify this policy, including moving to paying a flat rate for mileage over 50 miles.

What we will do to improve things: Given the lack of data on transport costs paid at present from DWP, the Scottish Government has decided not to alter the current policy on transport costs as it is unclear what the impact of this would be on individuals, including people living in rural areas who might be more likely to be affected. Instead, the Scottish Government will improve communications about what applicants are entitled to and will streamline application process where possible.

Payments to funeral directors

We understand that currently, in the majority of cases, the DWP makes payments directly to the funeral director on behalf of the applicant. However, the applicant can specifically request the payment be made to them (the applicant) if they wish, for example if they have already paid the bill.

Policy development so far: We understand this process provides the funeral director with reassurance about receiving payment for their services if the applicant is successful. It can also make it easier for bereaved families to manage their finances, and may help prevent financial abuse. However, this process may not always be clear to the applicant in terms of what is happening and why.

What we will do to improve things: The Scottish Government proposes to continue with the principle that the payment should be made to the funeral director where there is a bill outstanding, and make payment to the applicant where the bill has been paid. In addition, we plan to make this process more transparent for the applicant, ensuring they understand the decisions made, agree to how the payment is to be made, and are aware of the next steps throughout the process. We expect to progress and test the understanding of this process with users through the development of the FEA application process.

9. We have proposed to continue with the presumption that where there is a bill outstanding and the applicant consents, the payment will be made directly to the funeral director. Where the bill has already been paid, the payment will be made to the applicant.

Do you agree with a this approach?
Yes / No
If no, please explain:

Deductions

The DWP changed its policy in April 2018 so that deductions will no longer be made where the person paying for the funeral receives help with these costs from friends, family or charities.

Having asked a number of questions about deductions in our consultation on Social Security in Scotland in 2016, we had already made clear that the Scottish Government would not make deductions where contributions are made by friends and family. We, therefore, welcome the recent changes made by the DWP.

Policy development so far: Deductions are currently made for funerals of children where the child had assets in their own name, such as a child trust fund.

What we will do to improve things: The Scottish Government understands the particularly difficult circumstances faced by a family arranging a funeral for a child. We will no longer make deductions where the child had an estate, such as a child trust fund. We will not reduce the flat rate element from £700 for the funeral of a child. We are discussing child funeral charges with local authorities, funeral directors and private crematoriums to see what else might be possible to help in this area.

10. We have proposed not to make deductions from the payment award where there are assets in the name of the child who has died.

Do you agree with a this approach?
Yes / No
If no, please explain: