I think it is immoral, unethical and downright wrong to tax Bereavement Allowance – discuss!
My understanding is that if your husband, wife or civil partner has died you may be able to get Bereavement Payment: a one-off, tax-free, lump-sum payment of £2,000.
You might also be able to claim Bereavement Allowance if you’re a widow, widower or surviving civil partner between 45 and State Pension age. It is paid to you for up to 52 weeks from the date of death of your husband, wife or civil partner.
Now presumably these are to help you get over the initial impact of the loss of income from the person who has died – it will also help cover any expenses that you have to pay out for example the cost of the funeral – or for that matter the cost of getting certified copies of the documents you’re going to need to sort out the late person’s estate.
The Bereavement Allowance is however taxable! Which seems to me somewhat unethical, immoral and downright wrong. The amount you get is based on the amount that your late partner paid into the state via their NI contributions and is paid on the basis that your partner will not be able to receive the state pension that would normally be paid, for the duration of their life after pensionable age.
So in my example where my wife died at 54 having paid her NI contributions for over 30 years and with a normal life expectancy for women of what 80(?) she could have expected to receive somewhere in the region of £85,800. So it would appear that instead the amount the government will have to pay out is in the region of £5,500. So in my case the government is in profit to tune of over £80,000.
So tell me Steven John Webb, better known as Steve Webb (born 18 July 1965), is an English Liberal Democrat politician, the Member of Parliament for Thornbury & Yate and the Minister of State for Pensions – how do you justify making that benefit taxable?
According to Wikipedia, Webb was born in Birmingham to Brian and Patricia Webb, and attended the local comprehensive school (Dartmouth High School), before going on to study Philosophy, Politics and Economics at Hertford College, Oxford. He then worked at the Institute for Fiscal Studies in London, where he specialised in researching into poverty, taxes and benefits. In 1995, he became a Professor of Social Policy at the University of Bath.
Sound to me like he researched into how to increase poverty by decreasing benefits and increasing taxes. As he says on his website…..
If you are not one of my constituents but would like to raise an issue related to my role as Pensions Minister, please check the contact page at the Department of Work and Pensions or write to me at: Department for Work & Pensions Caxton House Tothill Street London SW1H 9DA.
So Steve answer my question – just how do you justify this policy?