Theresa May defends cut in payments for bereaved families

Theresa May has defended cuts to bereaved family payments as “fair to taxpayers” in a week where families with a terminally ill parent could see thousands wiped off their benefits if the parent survives beyond new rules introduced later this week.

The rule change will limit payments to widowed parents to a maximum of 18 months. Alan, a terminally ill man from Barnet in north London, called the reforms “callous and brutal” and said they had caused his family extreme anxiety in the last months of his life. The change will cost his young family tens of thousands of pounds.

Speaking en route to the Gulf, May defended the changes, which are part of a package of cuts, as a hangover from George Osborne’s 2015 budget. “The new bereavement support is going to replace a number of other payments that were there in the past,” she said. “The aim of the new payment is to make sure it covers, at the time it’s most crucially needed, the extra costs that are experienced following bereavement.”

Families with children in which one parent dies are currently eligible for a £2,000 lump sum followed by a taxable benefit of about £112 a week until the youngest child leaves full-time education, which can stretch over 20 years. For those who die after midnight on Wednesday, the lump sum will rise to £3,500 but the payments will be cut to £350 a month (about £80 a week) with a dramatically shorter time limit of 18 months.

May said the reduced amount had been agreed after consultation with the social security advisory council and various select committees.

“The aim is that it will be a different sort of payment to the ones that have been there in the past,” she said. “We have to ensure we have a system that is fair to people who require that help and support, but also that is generally fair to taxpayers.”

Alan, who has a wife and two children aged 10 and 14, said his family would lose out by thousands of pounds. “Based on the ages of our children and on my probable death – I would imagine this year – I had calculated that we would be entitled to about £58,000,” he said on Monday.

“The new calculation shocked me. My life is now deemed to be worth £6,300.”

The Department for Work and Pensions has argued the new system gives families a tax-free amount and had been modernised to take into account the number of women in work. However, charities have estimated that 75% of bereaved families will be worse off in cash terms while more than 90% will see the length of time they can receive support slashed.

The shadow welfare secretary, Debbie Abrahams, said the cuts were a “new low for this Tory government”, urging the prime minister to scrap them if she wants to help the “just about managing”.

As part of the welfare changes coming into force on Thursday, all households that have a third or subsequent baby – aside from a limited set of exemptions – will no longer be able to claim child tax credits. One analysis found that a family whose third child is born before midnight on Wednesday could be up to £50,000 better off over 18 years than one whose child is born on Thursday.

The Policy in Practice report found that more than 600,000 families would be affected by the changes to child tax credits, with an expected 8,000 third or additional children expected to miss out on support of up to £2,780 a year in April, a figure that could rise to as high as 104,000 over the next 12 months, depending on the number of births, according to the study.