The Department for Work and Pensions has recently claimed my partner is no longer entitled to receive her widow's pension.The decision flies directly
The Department for Work and Pensions has recently claimed my partner is no longer entitled to receive her widow’s pension.
The decision flies directly in the teeth of our understanding of the entitlement, which was that our cohabitation did not impact it.
Our question for the DWP is does this ruling mean we will also get entitlements which exactly mirror those of married couples in the areas of say inheritance tax and pension benefits? Your guidance would be appreciated.
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Payments ended: My partner has lost her widow’s benefit because we live together – is this right, or fair?
Steve Webb replies: In general, entitlement to National Insurance benefits is based around each individual contributor and, where relevant, their spouse or civil partner.
In most cases, simply cohabiting with someone outside marriage has no impact on what you can get.
For example, even if you have lived with someone as a couple for many years, and even if you have children with them, you are not entitled to bereavement benefits when they die unless you are married or in a civil partnership.
However, unfortunately you have encountered a situation where the National Insurance benefit rules *do* take account of the fact that you are living together as a couple, and these are being used to deprive your partner of the benefit she claimed when she was widowed.
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In this case, the relevant rules are contained in a piece of legislation first passed in 1992, though repeatedly amended since then.
Section 38(3) of the ‘Social Security Contributions and Benefits Act 1992’ says: ‘A widow’s pension shall not be payable… c) for any period during which she and a man to whom she is not married are living together as husband and wife.’
There is no single definition of what ‘living together as husband and wife’ means, but they would take account of things like whether you were permanently living together, sharing bills and so on.
They will have to make a decision on this based on your answers to their follow-up questions.
You ask whether, if you are to be treated as if you were married for these purposes, you can at least get some of the other benefits available to those who are married.
These could include more favourable treatment for inheritance tax purposes.
Unfortunately, there is no consistency between the tax and benefit system in the rules around marriage and cohabitation.
Just because cohabitation may cost your partner her widow’s benefit, it does not follow that you will be treated as a couple for inheritance tax purposes.
The rules around IHT are contained in different pieces of legislation which have their own definitions, and simply living together is not enough to qualify for the benefits which spouses can get.
For clarity, I should add that the means-tested benefits system (things like universal credit and pension credit) does take account of both marriage and cohabitation.
If you live with someone as part of a couple, then their income generally counts as part of your assessment even if you are not married to them.
But in most respects – except the one you have encountered – the National Insurance system only cares about marriage.
I do appreciate that this is a very frustrating situation.
My personal view is that the National Insurance system is not being consistent here.
If cohabiting couples can’t get bereavement benefits when one dies because they were never married, it seem inconsistent to deprive a widow of her benefit if she starts to live with a new partner – either cohabitation is relevant or it is not.
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Steve left the Department of Work and Pensions after the May 2015 election. He is now a partner at actuary and consulting firm Lane Clark & Peacock.
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