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Bereavement Support Payment

 

JRyan
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Welfare Benefits, ParagonCHG, Surrey

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CPAG handbook clearly states this does not count as income for means tested benefits and points to the Bereavement Support Payment Regs 2017 which, as far as I can tell, say no such thing. A written statement HCWS409 does say it but where is this reflected in the Regs I can show HB?

Thanks in advance.
J

 

      [ Edited: 15 Mar 2019 at 02:31 pm by JRyan ]
Charles
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Accountant, Haffner Hoff Ltd, Manchester

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JRyan
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Welfare Benefits, ParagonCHG, Surrey

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Joined: 13 February 2014

Thank you soooooo much.

     
JRyan
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Welfare Benefits, ParagonCHG, Surrey

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Permission to bang head against desk?

The legislation says;

Working age claimants

The monthly payments should be treated as unearned income and disregarded as income for one month from the date of payment. Any unspent money at the end of the month should be treated as capital but not disregarded.

Example 1: Lump sum and monthly payment
A working age claimant with two dependent children, claims BSP on 1 May 2017, following the death of their spouse on 20 April 2017. Their initial lump sum payment of £3,500 is made on 15 May 2017 and should be disregarded for 52 weeks from 15 May 2017 and will cease to be disregarded from 15 May 2018.
Their first monthly payment of £350 is made on 20 May 2017 as unearned income and disregarded for one month from 20 May. At the end of that month period on 20 June any money not spent is treated as capital and not disregarded.

The reply from HB

I also confirm that MP was of working age in February 2018 when she was awarded Bereavement Support payment. Therefore, her monthly payments of £100 would be treated as unearned income for the 52-week period (i.e. from 09 February 2018 to 08 February 2019) and disregarded only for the first month (i.e.09 February to 08 March 2018) in line with Housing Benefit regulations for working age claimants.

I am assuming they have taken the words date of payment to mean date of claim or date of first payment only as that is the only way they can get to a point where they believe only one payment is disregarded…

 

     
HB Anorak
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benefits consultant/trainer, hbanorak.co.uk, east london

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Yes, they are misinterpreting that.

BSP is disregarded as income at all times, end of.  But if it is saved it can morph into capital. The guidance is trying to make the point that it is still a payment of income albeit disregarded as such, therefore it does not become capitalized until the end of the period it relates to. This is by contrast with income treated as capital which counts as capital as soon as it is received. It seldom makes any difference because most people don’t have enough capital to affect their HB at the beginning or end of the income period, but where the payment of income would have some effect if treated as capital the timing does matter. This applies to each payment of BSP, not just the first one.

PS - added to clarify.  The one-off lump sum is not a payment of income, it is a payment of capital and it is disregarded as capital for 52 weeks.  If there is any left after 52 weeks, it then counts as capital.

The regular monthly payments are payments of income and are disregarded as income - all of them for as long as they continue.  But, just like any other source of income, they can turn into capital if the claimant saves the money.  The point at which unspent BSP income converts to capital is the end of the month following the payment date.  The same question is often asked in relation to PIP/DLA, and the answer is the same: disregarded as income but can accumulate as capital if saved.

      [ Edited: 14 May 2019 at 07:59 am by HB Anorak ]
JRyan
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Welfare Benefits, ParagonCHG, Surrey

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I’m slightly bemused how they have actually misinterpreted the legislation. Oh well, off to tribunal we go…

     
Charles
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To be honest, the guidance (not the actual legislation, which is pretty clear) isn’t the clearest. It reads, as you quoted above, “disregarded as income for one month from the date of payment”. The intention is that it is to be “disregarded as capital, due to being income, for one month…”. They’ve misunderstood it as being an income disregard. A time limit in an income disregard can only mean something like their interpretation.

     
JRyan
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Welfare Benefits, ParagonCHG, Surrey

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HB had a last minute change of mind when I advised I would be going to appeal. I do worry whether this is a common mistake that goes unnoticed.