§ Baroness Byfordasked Her Majesty's Government:
What evidence there is of possible fraud in the payment of Armed Forces pensions through the Post Office; and [HL4172]
Whether they consider that paying Armed Forces pensions by voucher rather than through the Post Office will reduce the risk of fraud. [HL4173]
§ Lord BachThe risk of fraud in the use of the payable order book for the payment of Armed Forces pensions arose from the fact that payable orders were exchanged for cash, and each book contained nine months-worth of pension payments. There have been48WA occasions where payable orders continued to be cashed after a pensioner's death or following the theft of a book.
The payment of pensioners by way of a voucher, or indeed the other alternative method of payment via a bankers automated clearing system transfer, will reduce considerably the scope for such fraud to occur. Unlike the payable order book method of payment, a voucher cannot be exchanged for cash, but has to be paid into a bank account. Each voucher is individually identifiable via an accounting system that can detect the bank account to which a voucher has been paid. As vouchers are forwarded to the pensioner either weekly or monthly, the period during which any potential fraud may take place, should they be lost or stolen, is also reduced. Pensioners may continue to draw cash from Post Offices subject to having an account with certain banks.