There are so many dimensions to the benefits system that it is easy for smaller parts to be overlooked, but the Government is leaving no stone unturned. The payments made for widows and widowers are no longer quite the same as they were after the Beveridge report, but they are one of the last vestiges of an insurance system where people paid contributions to protect themselves against certain contingencies and were protected by the principle of insurance. Last month, the government issued a consultation paper proposing a reform of bereavement benefits. The consultation paper comments that these benefits tend to have been overlooked when other benefits have been reformed, and aims to bring it into line. In this case, the particular target is the Widowed Parent’s Allowance, which is payable as an insurance benefit, regardless of other income or earnings. The numbers claiming it have been falling – with only 99,000 claimants, all bereavement payments come to about 40% of what they were ten years ago. The consultation paper complains that the existence of WPA can lead to long-term dependency. “The ongoing nature of payments under Widowed Parent’s Allowance, which can continue for up to 20 years in extreme cases, without any encouragement to maintain contact with the labour market, risks creating welfare dependency.” The argument seems to be that an insurance based pension might encourage a select group of people to withdraw from the labour market – but if that is so, why are these criteria not applied to occupational pensions? What it comes down to is simple enough: this government does not believe that the state should provide insurance, and is not content to have benefits which are designed on that basis.
The consultation is open until March 12th.