Select Committee on Social Security Appendices to the Minutes of Evidence


Memorandum submitted by South Lanarkshire Council (SF 31)


1.   Funeral Payments.

  1.1  Exclusion of "responsible persons"

  Regulations which exclude those who have accepted responsibility for the cost of the funeral from receiving a payment if other family members are not in receipt of benefits or are not estranged can cause significant hardship. South Lanarkshire Council believe that they should be amended.

  1.2  Amount of payment

  The sums awarded towards the cost of a funeral are mostly inadequate. South Lanarkshire Council believe that Social Fund payments should meet the full cost of a simple funeral.

  1.3  Capital rules

  South Lanarkshire Council believe that the capital limits should be brought into line with those which apply to Income Support or should be abolished altogether.

2.   Regulatory Social Fund. Sure Start Maternity payments.

  2.1  South Lanarkshire Council welcome the increase in awards of the Sure Start Maternity payments. However, South Lanarkshire Council believe that the capital rules should be brought in line with those which apply to Income Support or abolished altogether.

3.   Discretionary Social Fund. Community Care Grants.

  3.1  Eligibility

  South Lanarkshire Council believe that in order to meet the needs of vulnerable people in the community, Community Care Grants (CCGs) should be considered for those on low income who are not in receipt of Income Support/Income Based Jobseeker's Allowance (IBJSA).

  3.2  Decision Making

  South Lanarkshire Council believe that there is an inherent difficulty for appropriate officers in attempting to exercise discretion when making decisions on CCG applications within the constraints of a budget and that there should be a substantial increase in the CCG budget. There is also concern about the consistency of decisions.

  3.3  Applications to the fund

  South Lanarkshire Council are concerned at the significant decrease in the number of applications for Community Care Grants since the separation of applications for grants and loans.

4.   Budgeting Loans

  4.1  Budgetary principles

  The view was expressed that the cost of important intermittent expenses should be met by way of grants rather than loans.

  4.2  Eligibility

  It was considered that claimants on low income who are not in receipt of Income Support/IBJSA may require assistance in budgeting for intermittent expenses and that the eligibility criteria could be extended to other claimants on low incomes.

  4.3  Weighting

  South Lanarkshire Council believe that the weighting system draws arbitrary distinctions between claimants in receipt of the same benefit, and can result in considerable hardship for some claimants.

5.   Crisis loans

  5.1  Concerns were raised at some of the practice issues which arise in relation to crisis loan applications.


  1.  South Lanarkshire Council's Money Matters Advice Service deals with welfare rights and debt related enquiries through eight offices across the Council. In the period April 1999 to March 2000 the service received 45,310 enquiries 2118 of which were Social Fund related. In addition staff based within the six Social Work area teams, deal with Social Fund enquiries on a daily basis.

  2.  Members of staff have raised a number concerns regarding the role of the Social Fund and its operation in practice. These relate both to the Discretionary and the Regulatory Social Funds and are explored in the following paragraphs.

3.   Funeral Payments (Regulatory Social Fund)

  3.1  South Lanarkshire Council are concerned that the rules which exclude a "responsible person" from receiving a payment towards the cost of a funeral even though they have accepted liability for that cost and entered into a contract with the funeral director together with the restrictions on the amounts awarded for the cost of a funeral frequently result in hardship for claimants.

  3.2  The rules which prohibit applicants from qualifying for a funeral payment where other immediate members of the deceased's family are neither estranged from the deceased nor in receipt of specified benefit can be a source of particular hardship.

  3.3  In one example the claimant, who was the son of the deceased, had accepted responsibility for his mother's funeral, which cost £1000. The application was refused on the grounds that his sister, who was in full time low paid employment, was in equally close contact with the deceased and received no specified benefits. The applicant's sister refused to pay the cost of the funeral. As her compliance was not enforceable and as he was liable for the cost of the funeral the claimant was left with a debt of £1000.

  3.4  In another example the difficulty for decision makers in adjudicating on the meaning of estrangement was highlighted. The applicant, who was the daughter of the deceased, accepted responsibility for the funeral and was in receipt of a qualifying benefit. Her brothers had all moved to London following a dispute with their mother, and were in full time employment. None of them attended the funeral. The Decision Maker did not accept that the brothers in London were estranged from the deceased. The claimant, unable to compel her brothers to meet any of the costs, was left with a substantial debt.

  3.5  The third example highlights an anomaly within the criteria relating to the treatment of a claimant as a "responsible person". The mother of a UK worker who died in a state of the European Economic Area was refused benefit to cover the cost of her son's funeral there. Regulations allow a claimant who is a worker for the purposes of EC regulations to claim for a funeral that takes place in an EEA state, yet denies these rights to a UK citizen whose son dies abroad.

  3.6  These examples illustrate the hardship that can arise as a result of the regulations governing eligibility and the amount of payment.

  3.7  The requirement for Decision Makers to pass qualitative judgements (ie: whether a relative is estranged from the deceased or whether one person had equal or closer contact with the deceased than another) when the person best able to comment is no longer alive, appears anomalous.

  3.8  It is accepted that family members should share responsibility following the death of their relative. However the assumption underlying the regulations, that those family members whose circumstances exclude the claimant from being eligible will foot a bill which they are not liable to meet out of good will, is not borne out in reality. The consequence of a decision excluding a claimant from receiving a payment may leave the poorest member of a family with a substantial debt.

  3.9  South Lanarkshire Council believe that regulations concerning the "responsible person" are cumbersome, resulting in financial hardship, and should be amended.

  3.10  Amount of benefit. Members of staff advise that owing to the restriction on the amount which can be awarded, or the types of expenses which can be claimed by claimants, the full cost of the funeral is rarely met.

  3.11  Local funeral directors have advised that the average cost of a simple funeral is usually in excess of £1000 but that awards from the Social Fund rarely exceed £900. Quite apart from those who have accepted responsibility for the cost of the funeral but have been refused a payment owing to the regulations already discussed, it would appear that most benefit claimants have to meet some shortfall either from other sources or through reaching a repayment agreement with the funeral directors.

  3.12  One Money Matters office spoke of a local funeral director who contacted them seeking advice because of the amount of debt he now had to deal with. Another funeral director voiced his concern that claimants were in some instances submitting appeals against decisions on the amount of benefit awarded (with little prospect of success) so as to delay the need to make arrangements regarding the debt.

  3.13  South Lanarkshire Council believe that the Social Fund should meet the full cost of a simple funeral.

  3.14  The capital rules, whereby any award is reduced by every pound of the claimant's capital in excess of £500 (£1000 for those over 60) may lead to claimants paying substantial amounts towards the cost of a funeral even though they are on means tested benefits where the capital limits are far higher.

  3.15  A claimant on Income Support with capital of £2000 would be expected to meet the full cost of a £1,200 funeral thereby reducing his capital to £800. As the death of a close relative/friend is an event over which a claimant has no control and for which he had not planned it appears unduly punitive to require the claimant to use his savings for that purpose.

  3.16  South Lanarkshire Council believe that the capital limits for funeral payment should be brought into line with those which apply to Income Support/IBJSA or should be abolished altogether.

4.   Sure Start Maternity Grant (Regulatory Social Fund)

  4.1  South Lanarkshire Council welcome the increase in the amount of the Sure Start Maternity Grant to £300 from Autumn 2000. However the increased amount may yet remain inadequate to meet all the costs associated with a new child. South Lanarkshire Council are concerned that modest savings, which a claimant may have accumulated to help towards the start of costs of a new child, should impact on an award pound for pound at such a low level.

  4.2  South Lanarkshire Council believe that the capital limit of £500 should be raised in line with Income Support or abolished altogether.

5.   Community Care Grants (Discretionary Social Fund)

  5.1  Many claimants whose income is just above their applicable amount (for example those with a small occupational pension, or in receipt of Incapacity Benefit) may be vulnerable people needing help to stay in the community but are unable to meet the cost of items arising at times of special need.

  5.2  It is the view of South Lanarkshire Council that eligibility should be extended to include other claimants on low income.

  5.3  South Lanarkshire Council support the principles underlying Community Care Grants; namely that they are intended to help vulnerable people live as independently as possible in the community by assisting them when faced with difficulty as a result of special circumstances.

  5.4  However statistics regarding the success rate of CCG applications indicate that many who believe themselves to be facing difficulty as a result of special circumstances are not held to be so by the BenefitsAgency. Different Money Matters offices report that decisions resulting in awards on initial applications range from 50% to 25% of those applications. National statistics[31] indicate decisions resulting in awards as 34% of all CCG applications in 99/00. (in 98/00 the figure was 19% of CCG applications) This is a small number, representing only 218,620 awards of grants from a total of 3,617,000 applications to the fund as a whole.

  5.5  South Lanarkshire Council are of the view that it is very difficult for appropriate officers to exercise discretion in individual cases whilst working within budgetary constraints. There is also concern regarding the consistency of decision-making and difficulties in some claimants obtaining awards who on the face of it appear to satisfy Direction 4 and have a high priority need.

  5.6  Two Money Matters offices recently reported difficulties encountered by families fleeing domestic violence who were refused Community Care Grants to furnish their new tenancies on the grounds that they failed to satisfy Direction 4.

  5.7  National statistics[32] confirm that the majority of CCG refusals (66.1% of all refusals) are due to the claimant's failure to satisfy Direction 4. South Lanarkshire Council are concerned that there are many more people who satisfy the criteria for CCGs than are awarded benefit, and that appropriate officer's discretion is fettered by budget considerations.

  5.8  South Lanarkshire Council believe therefore that there should be a substantial increase in the budget for grants.

  5.9  South Lanarkshire Council is concerned at amendments introduced by the Social Security Act 1998 whereby applications are no longer treated as applications to the fund as a whole. It is our view that this may disadvantage many unrepresented claimants who may be deterred from claiming grants and turn to loans instead. This is confirmed by national statistics[33] indicating that the number of CCG applications almost halved between 1998/99 and 1999/00 and that the number of overall loan applications increased by 40% during that time.

  5.10  Staff are also unaware of any circumstances where information contained in a loan application led to the claimant being invited to claim a CCG as envisaged in the Social Fund Guidance.

  5.11  South Lanarkshire Council are of the view that applications should be treated as applications to the fund as a whole

  Reviews. Some concern has been expressed at the delays which may be involved in the review process. Some staff report delays of 10-12 weeks in processing reviews, which compounds the hardship experienced by claimants.

6.   Budgeting Loans (Discretionary Social Fund)

  6.1  It is the view of some staff that a loan system for claimants who are already on the breadline causes hardship and can result in almost persistent indebtedness. Because of this some believe that the loan system should be abolished and replaced with a grant-based system.

  6.2  South Lanarkshire Council believe that entitlement to budgeting loans should be extended to other claimants in receipt of low income who may experience considerable difficulty in budgeting for certain expenses.

  6.3  Staff view the weighting system as being unfair. The distinction between clients in receipt of benefit over different periods of time appears arbitrary. In one example a 17-year-old girl moving into her first tenancy applied for a budgeting loan of £1000 to cover the cost of furniture etc. She was awarded a loan of just over £200. (She did not satisfy the criteria for a CCG)

  6.4  Repayments to the Social Fund are, on average, £9.00 per week with some claimants agreeing to higher repayments in order to secure larger loans. This debt in turn eats into the claimant's ability to meet routine weekly costs, such as food and heating.

  6.5  Because the criteria used for deciding eligibility for a Budgeting Loan is now largely automated there is little right of review against adverse decisions. Claimants experience considerable frustration in being unable to challenge the amount of the award, and, because they are unlikely to be awarded a CCG, seek other means of paying for the items which remain essential

7.  Crisis Loans (Discretionary Social Fund)

  7.1  A number of issues regarding BA practice were raised in relation to Crisis Loans. These included the following:

    —  BA staff were deterring clients from claiming crisis loans on the grounds that they would not be awarded one.

    —  Claimants being referred to other agencies (ie Social Work) for assistance.

    —  Particular problems in relation to lost and missing giros.

  8.   South Lanarkshire have concerns regarding many aspects of the Social Fund, its role and operation in practice. It is hoped that through highlighting some of the difficulties experienced locally we will have been of some assistance to the Committee in their inquiry.

January 2001

31   Annual Report by the Secretary of State for Social Security on the Social Fund 1999-2000. Back

32   Ibid. Back

33   Ibid. Back

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