Adequacy of Social Fund Funeral Payments

Are social fund funeral payments adequate? A Common Library briefing last week examined this issue, looking at the funds awarded to people to help them with funeral costs.

Social fund funeral payments are generally given to people who are claiming means-tested benefits and tax credits, and the adequacy of such payments has long been a source of complaint. Complex eligibility criteria have also been criticised, as it has created confusion, frustration and further emotional distress at a time when people are grieving.

Payments from the social fund are made from a regulated fund and, as such, aren’t limited by
budgetary constraints. In 2015-16, 28,000 payments were made in the UK at a cost of £40 million, with the average award being £1,400.

This compares to the average cost of a funeral of £3,700 in 2015, which buys you only the most basic of funerals as funeral director fees make up the bulk of the costs, their prices having gone up by 5 percent on average.

Adequacy of Payments

Successive UK governments have said that the scheme provides what they say is a “contribution
towards the cost of a simple, low cost respectful funeral,” but critics argue that the adequacy of
payments in relation to actual funeral costs do not match up.

Under the scheme, claimants can get full help with certain funeral expenses including the burial or cremation. Other expenses – such as the funeral directors’ fees, the cost of a coffin, church fees and flowers – may be covered, but only up to a maximum amount, £700.

The average award from the fund in 2014-15 was £1,375, less than 40 percent of the estimated
average cost of a funeral. The rules about access to social fund budgeting loans have now been
changed so there is additional help for low income families facing funeral costs. However, these are repayable.

Criteria for Eligibility

Funeral payments are subject to complex eligibility criteria, including whether the person has
accepted their responsibility for meeting the funeral costs, how they are related to the deceased, and whether there are others equally or more closely related who aren’t on benefits.

Research on social fund funeral payments has flagged up a number of issues. They include:
– confusion about the rules on eligibility and the amount paid to successful claimants
– the order in which funerals are organised and when claims are administered
– the way in which family relationships are assessed and how the decisions about
responsibility for funeral costs are made.

Only 59 percent of applications processed in 2014-15 received an award, but with the Department of Work and Pensions requiring an invoice to process a claim, applicants have to commit to meeting the funeral costs without knowing how much, if anything, they will receive.

The Work and Pensions Committee recommended that the application process for Funeral Payments be simplified and clarified in a report earlier this year. They suggested an online “eligibility checker” for prospective applicants.

The UK Government thinks an online checker might cause additional confusion for bereaved people, but it is investigating other solutions to see if there is anything that would better address the underlying problem of people not understanding eligibility.

Under the Public Health (Control of Disease) Act 1984, a local authority must arrange the cremation or burial of the body of any person who has died or been found dead in the authority’s area, if no suitable alternative arrangements have been or are being made.

However, local authorities are not able to reimburse the costs of any person who has already
arranged a funeral, or to help with shortfalls that are not met from social fund funeral payments. If someone dies in NHS care, the NHS can arrange and pay for the funeral, if there are no relatives or friends who are willing or able to do so.

Finders International recently set up a funeral fund to help hard-pressed local authorities and NHS Trusts. If someone dies in local authority or hospital care, and there are genuinely no known next of kin we can subsidise some of the costs of a Public Health Act funeral. We will assess each case on its merits.