Grieving widows and civil partners will no longer be entitled to ongoing bereavement benefits worth thousands of pounds a year under government plans.
Currently, some 41,000 bereaved partners receive benefit payments that can continue for up to 20 years to help them raise their children and cover household bills after losing a spouse.
However, under plans published yesterday, the benefits will end after one year as ministers seek to encourage more widows, widowers and civil partners to return to work.
The government believes that the current £600 million a year system is “antiquated” and derives from a time when women were not expected to work and would have needed more support from the state.
Lord Freud, the welfare reform minister, said the current system offered no encouragement to the bereaved to find employment.
“Losing a spouse or civil partner is a life changing event emotionally, socially and economically,” he said.
“There is an important role for Government to play in providing some relief from the financial pressures in the short term to support them during this readjustment.
“However, the current system is inconsistent and complex, with some claimants qualifying for a lump sum and others receiving payments for as long as 20 years with no encouragement or support to return to work.”
Lord Freud argued that the “primary aim” was “not to cut costs” but to make the benefits more effective.
Ministers are concerned that the current process can undermine people’s long-term job prospects by encouraging them to stay at home for longer.
Each year, the government spends £600 million on the three existing benefits for the bereaved. These are bereavement payments, which are a tax free lump sum of £2,000; bereavement allowance, which averages £77.93 per week; and widowed parent’s allowance, which stands at £100.72 per week on average.
The benefits are not means tested, but rise with age and the national insurance contributions which were made by the claimant’s deceased partner.
Two options are being proposed in the consultation, run by the Department for Work and Pensions.
The first option would be to replace all the existing benefits with one lump sum payment of £10,000 for people with dependent children, and £6,000 for those without.
The second proposal would be for a lower lump sum of £5,000 with a monthly allowance of £400 for one year for people with children.
For those claimants without dependent children, option two would involve a £3,000 lump sum, plus a monthly allowance of £250 for a maximum of one year.
The DWP said no forecasts had been made about whether either of the plans would save the taxpayer money if introduced.
Lord Freud said: “The benefits need updating to ensure that they effectively support bereaved spouses and civil partners at a difficult time. I invite anyone with an interest in these benefits to comment on our proposals.”
The War Pensions Scheme and Armed Forces Compensation Scheme will not be affected by the review, while officials said those already receiving bereavement benefits would not be affected when the new system is introduced.