HC Deb 29 November 1999 vol 340 cc53-5W
Valerie Davey

To ask the Secretary of State for Social Security (1) what assessment he has made of the accessibility to benefit recipients of(a) post offices and (b) banks; and if he will estimate the average distance from home in each case; [99270]

(2) what investigation the Benefits Agency has conducted of the effects of its decision to pay benefits through banks by 2003 on (a) benefit recipients, (b) banks and (c) post offices, with particular reference to smaller post offices; and what the results were; [99271]

(3) in his discussions with the banks about paying benefits through bank accounts, if the banks have agreed to (a) handle the cash necessary for all benefit recipients and (b) issue bank accounts to all benefit recipients. [99269]

Mr. Webb

To ask the Secretary of State for Social Security (1) what assurances he has received from the banking industry that, if new accounts were opened solely for the purpose of receipt of social security benefits, no charges would be levied for the withdrawal of cash; [99577]

(2) what assurances he has received from the banking industry that, in the event of all benefit payments being made into bank accounts from 2003, bank accounts would be available to all benefit recipients. [99570]

Mr. Rooker

No assessment of the accessibility of post offices or banks to benefit recipients has been made. Customers can choose to access their benefits in cash at both post offices and banks. We have no plans to change this.

We have decided to move to automated credit transfer (ACT) from 2003 as a modern, more secure and efficient method of paying benefits. People are increasingly choosing ACT as their preferred method of payment. The Benefits Agency and Post Office Counters Ltd. will be working together to build on this trend to ensure that, from 2003, ACT offers an attractive choice to benefit recipients, opening up access to a wider range of banking and other financial services, while continuing to offer access to cash at post office counters. The Performance and Innovation Unit will pay particular attention to this as part of their study into the post office network which was announced by my right hon. Friend the Prime Minister on 21 October.

The Department will be arranging discussions with the banking industry on issues surrounding benefit recipients, charges and other matters in due course. We envisage there will be alternative arrangements for anyone who cannot open a bank account. We will ensure procedures are in place for payment of emergency payments where cash is required on day of decision.

Mr. Crausby

To ask the Secretary of State for Social Security what plans he has to change the present system of benefits payments by requiring all recipients to receive payment by automated credit transfer. [99632]

Mr. Rooker

We are to move from the traditional paper based methods of payment to a more modern, secure and efficient way of paying benefits using the existing Automatic Credit Transfer (ACT) system to make benefit payments available through banks and the Post Office network. The new arrangements will begin in 2003 to be completed by 2005. Those benefit recipients who wish to collect their benefits in cash at post offices will continue to be able to do so.

Valerie Davey

To ask the Secretary of State for Social Security what assessment he has made of the extent of fraud when benefits are paid(a) through bank accounts and (b) through post offices. [99268]

Mr. Rooker

The majority of payments through bank accounts relate to benefits such as Retirement Pension and Child Benefit. Few cases of fraud have been detected in these payments; however, the BA continues to work on identifying risks on dealing with them.

It is estimated that fraudulent losses from benefits paid through post offices were £19.4 million in respect of girocheques and £83.3 million in respect of order books.

Mr. Webb

To ask the Secretary of State for Social Security (1) what the results were of his trial of the use of a benefits payment card in respect of the level of benefit fraud; [99566]

(2) what assessment he has made of the extent of benefit fraud when payments are made by automated credit transfer. [99568]

Mr. Rooker

A pilot payment card exercise started in September 1996 in 12 post offices. The full trial took place from April 1997 to May 1999 in 204 post offices in the south-west and north-east areas of England. In total, 35,000 Child Benefit customers were issued with payment cards. No cases of benefit fraud were found.

Around 65 per cent. of all benefits are still paid to customers by order books and girocheques which are cashed at post offices. However, automated credit transfer (ACT) is becoming more prevalent and therefore, as the attendant risks increase, the Benefits Agency (BA) is working on identifying the nature of the fraud associated with this method of payment.

The majority of payments through bank accounts currently relate to benefits such as Retirement Pension and Child Benefit. Few cases of fraud have been detected in these payments.