Published on: 15th November 2021

Funding for Bereaved Families to be Extended to Cohabitees

In 2001, the Widowed Parent’s Allowance (WPA) was introduced, allowing working-aged people who had recently lost a spouse or civil partner and were entitled to Child Benefit to receive financial aid. The WPA was replaced in 2017 by the Bereavement Support Payment (BSP) which expanded the WPA to provide support to working-aged people with costs relevant to the death of their spouse or civil partner regardless of having dependent children.

These payments provided bereaved families with the support that they needed in a difficult time. Both benefits, however, were challenged in the courts for restricting eligibility to just those in a legal union. Campaigners against these benefits say that it discriminates against children whose parents are in a cohabiting (unmarried) relationship. For that reason, both the Supreme Court and High Court ruled that the allowances were incompatible with the European Convention on Human Rights. As a result of these cases, both the WPA and the BSP will be extended to surviving cohabitating partners with children. The Department for Work and Pensions (DWP) has published a draft remedial order with these changes. The policy change will apply from 30 August 2018 - the date of the decision of the Supreme Court case - meaning that in some cases, bereaved families will be able to claim for retrospective payments. An estimated 22,000 families will be able to claim this help which will total an estimated £320 million over the next five years.

The deadline for the public to provide comments on the draft bill is in November 2021. There will then be at least an additional 60 sitting-days of Parliament before it could become law. As this amendment is based on rulings from both the High Court and Supreme Court, it must eventually pass in some form and is expected to do so easily.

The court rulings came as the Office for National Statistics released figures explaining that cohabiting (unmarried) couples were the fastest growing family type in the decade of 2008-2018 “with a statistically significant increase of 25.8% from 2.7 million in 2008.” This now means that over 13% of the UK population is in an unmarried cohabiting relationship. The expansion of the WPA and BSP is welcomed as many other support aspects are still restricted for unmarried partners. Cohabiting couples, for example, are still not included in the distribution of an estate under the Laws of Intestacy. Under these rules, a surviving partner would not be provided for. Currently, the only way to mitigate this is by creating a Will. Additionally, unmarried partners face negative Inheritance Tax liabilities as they cannot receive a transferable Nil-Rate Band allowance. Through the creation of certain trusts, however, there are ways to reduce Inheritance Tax liabilities for cohabiting (unmarried) couples.

At Casey & Associates, we have significant experience in Estate Planning and Will writing for cohabiting partners. If you are in this situation and need Estate Planning or Estate Administration advice, please consider booking an appointment with a Casey & Associates consultant by contacting the friendly and experienced Client services team at 01732 868190 or contact us using our website by clicking here.

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