The International Pension Centre (IPC) which is part of The Pension Service and deals wi benefits for those living abroad.
It�s not likely they think yir mother-in-law has died, more likely they have sent something to her that needs a reply or has been returned as undelivered, either way they think there has been a change in her circumstances that may affect her entitlement so they have stopped payments hoping she�ll be in contact.
If she is in a care home I would have thought that someone there would be handling any post received so it may be worthwhile contacting the home to see if she�s had any UK post recently.
Also you can contact the IPC to tell them the situation and find out what you can do by way of getting someone to act on her behalf so the pension can be re-instated asap.
You can get contact details here,
http://www.thepensionservice.gov.uk/contactus/ contact-pod-form.asp