§ Mr. CorbettTo ask the Secretary of State for Social Security (1) if he will estimate the cost to the Benefits Agency of making payments to claimants via automated credit transfer; and if he will state how that figure is calculated; [107452]
(2) he will publish arrangements to set up bank accounts for benefit payment recipients who do not have bank or building society accounts; [107450]
(3) what estimate he has made of the number of welfare benefit recipients who will receive payments via automated credit transfer by the end of (a) 2003, (b) 2004 and (c) 2005. [107451]
§ Mr. RookerThe overall average unit cost to the Benefits Agency of making a payment to a claimant via automated credit transfer (ACT) is in the order of 1p.
It is not appropriate to give a full breakdown of how this figure is calculated as part of the costs are commercially confidential between the Benefits Agency and its suppliers.
The vast majority of benefit customers already have bank accounts. We will be making arrangements for the people and payments where ACT is not the right answer. This may include supporting people as they access the 469W increasing number of simple banking products being introduced. As these arrangements will not be required until after 2003 we are still researching our customers' needs and studying current market trends.
In 2003, the transition from current paper-based methods of payment will begin, and by the end of 2005 the majority of benefit recipients will receive payments via automated credit transfer. Detailed migration plans are not yet in place. We are still researching our customers' needs and will ensure that the migration is managed carefully and in a way that will not put at risk the efficient distribution of benefit payments.
Around one third of benefit recipients already choose to have their benefits paid by automated credit transfer, direct into their bank accounts, and the vast majority, around 85 per cent, already have access to a bank account. However, there will be some limited exceptions. We have given an assurance that those benefit recipients, whether paid by automated credit transfer or otherwise, who wish to collect their benefits in cash at post offices will continue to be able to do so.