A review is under way into the Government's compensation scheme for families of British people murdered outside the UK and the European Union.

The news comes after it was confirmed the family of murdered Essex backpacker Grace Millane would receive no compensation for her death since it happened outside of Britain and the EU, in New Zealand.

Currently, the bereaved families of people murdered in the UK and in EU member states can apply for a compensatory payout, but there is no funding available in relation to Britons killed elsewhere.

According to the Sunday Express, the case of Ms Millane prompted Labour MP Jim Cunningham to ask what the Ministry of Justice was doing "to ensure families whose loved ones are murdered abroad have access to criminal injuries compensation".

Justice minister Wendy Morton said a review of the UK system was taking place.

"A review of the Criminal Injuries Compensation Scheme is under way, looking at its scope, and eligibility rules and requirements," Ms Morton was quoted by the Sunday Express as saying.

"The recommendations of the Victims' Commissioner in her report on the entitlements and experiences of bereaved families following homicide abroad will be considered carefully as part of this review."

Ms Morton said at present the only cases in which bereaved families could gain compensation for loved ones killed outside the EU involved victims of terrorism. Their families can apply through the Victims of Overseas Terrorism Compensation Scheme.

Ms Millane was strangled in Auckland almost a year ago, on either the night before she turned 22, or in the early hours of her birthday date of December 2.

Last Friday a jury in Auckland found 27-year-old Jesse Kempson guilty of her murder following a three-week trial.