§ Mr. Sternasked the Secretary of State for Social Services if he has any plans to change the method of payment of social security benefits to people who live overseas; and if he will make a statement.
§ Mr. NewtonYes. Generally, United Kingdom pensioners living overseas are at present paid by four-weekly payable orders sent from Newcastle or North Fylde central offices of the Department. As a result they incur postal delays, delays in changing the order into local currency, bank fees and handling charges.
A departmental study has shown that these problems can be substantially reduced by making these payments by automated credit transfer directly into pensioners' bank accounts in the local currency. We have therefore decided to offer this optional service to all pensioners living in countries where the local banking arrangements make it possible.
Initially, we expect it to be possible to offer the new service to pensioners in Australia, Canada, Irish Republic, USA, South Africa, West Germany, France, Belgium, Netherlands, Switzerland, Denmark, Norway and Sweden; in the case of New Zealand, United Kingdom pensioners are already paid through the New Zealand social security authorities rather than by payable order. It is estimated that the new service will cover about 300,000 of the 400,000 United Kingdom pensioners living overseas, and that they will gain by about £3 per payment. Invitations to them to change to the new system will start to be issued later this year.
Following examination of 11 tenders to provide the transfer service, that from the Bank of Scotland has been accepted. Additional jobs at the Bank of Glasgow are likely to result.