Altmann backs GIP incentive and slams bereavement benefit cut

The Government should rethink its cut to bereavement benefits and employers should be given fiscal incentives to offer group income protection says Baroness Altmann.

Altmann-Ros-2010-700x450.jpgAltmann’s call for a rethink on bereavement benefits comes after the death from cancer of a campaigner against the changes just weeks after the new rules came into effect on 6 April. The timing of his death meant his family will be entitled to around £50,000 less benefits than if he had died four weeks earlier.

Under the old Widowed Parent’s Allowance rules, the surviving parent was entitled to £112 a week until the youngest child left full-time education. Under the new rules, around £80 a month tax-free is paid for a maximum of 18 months.

Altmann has also thrown her weight behind calls for fiscal incentives for group income protection, but only where benefits are offered to all employees on equal terms. Before the General Election was called, the Department for Work and Pensions was considering the responses to its Improving Lives: Work, Health and Disability green paper, issued jointly with the Department for Health. The paper has called for the insurance industry to spell out the role it can play in supporting the recruitment and retention of disabled people and people with health conditions, and wants views on how employers of all sizes can be encouraged to make better use of group income protection.

The former DWP minister said: “There should be an opportunity for group income and life insurance protection which at the moment is being missed too often. I believe that part of the reason that life insurance is not so widely available is that it used to be included automatically in a defined benefit scheme.  With most now closed and newer employees being put into DC schemes, the ‘free’ life insurance from the DB scheme has disappeared and not been replaced.

“I believe incentives for group income protection should be considered, but only where the employer is giving the benefit to all staff on the same terms. I can the see social and individual benefit in the government encouraging employers to cover the whole of their workforce with long-term sickness protection.

“And I truly believe the Govt should think again about bereavement benefits when young children are involved.  Stopping payments after just 18 months can’t be enough time for them to have coped and moved on.”