§ The Parliamentary Under-Secretary of State for Work and Pensions (Mr. Chris Pond)Direct Payment is a modern, reliable, secure and efficient method of payment which is proving popular with those pensioners and benefit recipients who are using it. More customers now have their pensions and benefits paid into an account than by order book. We will be writing to the remainder before the end of the year inviting them to convert to direct payment.
Eighty seven per cent. of DWP customers already have access to an account suitable for direct payment (the figure rises to 91 per cent. for pensioners). The wide availability of new, easy to operate accounts (including basic bank accounts and the Post Office card account) means that there should only be a very small number of people that cannot genuinely open an account— including, for example, some homeless people and some people with an illness or disability. There will also be some people who cannot manage an account—some will never be able to manage one (again due to illness or disability), while others may be in this position for only a short period (perhaps due to the absence of a regular carer or a short period of mental illness).
7WSSeveral meetings have been held with customer representative groups (including CAB, Help the Aged, Age Concern, MIND etc) to ensure there was a shared understanding of the needs of the customers who cannot be paid directly into an account. These meetings helped us develop a detailed list of requirements and played a key role in shaping the detailed design of the exceptions arrangements.
In assessing options for the ongoing method of payment for customers who are unable to open or manage an account a number of criteria were taken into account including; the ability to meet the needs of customers, timescales for delivery, reliability and cost. To meet customer needs and maintain a robust delivery service we have decided to continue with the existing system of cheques, with improvements to the security of the service.
Customers who will require a cheque payment are likely to include those who are least able to cope with change, but will already have had experience of, and be familiar with, cashing paper instruments of payment at the Post Office. The cheque solution replicates this process and will best suit these customers.
Cheques can be issued on a weekly basis to the customer's home address (less frequently for some people) and are cashable at Post Office branches (as well as payable into bank accounts). Very importantly, they offer the flexibility needed for those customers who have a series of different people collecting their money for them and will be a solution for those people who are unable to operate PIN-based or cheque based accounts.
Safeguards will be in place to ensure people get their money in the event that the cheque does not arrive on time.
Paying by cheque is a well-established method of payment. We will closely monitor the operation of cheque payments to ensure that they meet the needs of some of our most vulnerable customers. If this identifies significant problems with these arrangements then we will make the necessary improvements.
As we have made clear cheque payments are designed for those vulnerable people whose benefits or pensions we cannot pay into any type of account. In order that we can provide the necessary level of support to this group we will, in parallel, introduce measures to ensure the maximum number of people who can use an account understand the comparative benefits of direct payment.