Bereavement benefits extended to unmarried couples

In 2021, just over one in five couples living together were cohabiting but not married or in a civil partnership. Despite the growth in cohabitation, the UK tax and benefit systems have an ambivalent approach to those individuals outside the two legal frameworks. For example, an unmarried couple’s joint income is taken into account when considering Universal Credit claims, but they are unrelated individuals when it comes to inheritance tax.

Two challenges to an example of this differential treatment made it to the courts several years ago. Both cases concerned bereavement benefits, which the law at the time restricted to surviving spouses and civil partners. In both instances, the government lost, but not because it was discriminating against unmarried couples. The courts’ decision hinged on the unequal treatment of each couple’s children, which fell foul of the European Convention of Human Rights.

Now three years after the second defeat, legislation is finally going to ‘rectify’ the original law. The revisions will mean that if one individual in an unmarried couple with dependent children were to die, the survivor would be entitled to the same higher rate of Bereavement Support Payment (BSP) as would be available to a surviving spouse or civil partner. The change will be backdated to 30 August 2018, when the Supreme Court gave the first ruling. The backdating will also cover entitlement to Widowed Parent’s Allowance, which was replaced by the BSP for new claimants from 6 April 2017.

While the inclusion of some unmarried couples of BSP is welcome, it comes with two major caveats:

• It applies only to unmarried couples with dependent children, which includes cases in which the survivor is pregnant at the time of their partner’s death. Unmarried couples who do not have dependent children remain excluded from BSP.
• The amount of BSP is far from generous. The higher rate of BSP was set in 2017 as a lump sum of £3,500, plus up to 18 monthly payments of £350. Unlike most other benefits, it has been unchanged since, so inflation has cut its value by nearly a fifth.

If you are cohabiting – or even if you are not – the BSP rules are a reminder of the inadequacy of the ‘safety net’ provided by the state in 2023. With this in mind, it’s important to build your own safety net and protect your future financial circumstances.