Claimants will be required to use bank account as minister salutes work of ‘hidden heroes’
The Department for Work and Pensions will no longer allow new benefits or pensions recipients from collecting payments via Post Office card accounts as of next week, as the department prepares to phase out its use of the payment system entirely next year.
POCA has been a mechanism for DWP to pay state pensions and benefits to people since 2003, but its contract with the Post Office will end in November 2021.
Work and pensions secretary Thérèse Coffey said the cost of the contract provided “poor value for taxpayers” given that most people using POCA already have bank accounts. It is cheaper for DWP to pay money directly into bank accounts than to use the POCA system.
Around 900,000 people use POCA to collect payments. However, DWP has been trying to encourage them to have benefits paid directly into their bank accounts instead.
The department has been writing to pensioners over the last three years saying they are now expected to use bank accounts.
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“Uptake of accounts in the last year has been exceptionally low but, in any event, given that the vast majority of people using POCA we believe already have a bank account, the cost of the contract is poor value for taxpayers,” Coffey said yesterday. “Current customers who currently receive payment through a Post Office card account will see no change and will continue to receive payment into their accounts for the remainder of the contract period.”
She added that an exception service would remain in place to make payments to people who cannot access any bank account would remain in place.
The cabinet minister also said DWP was using a contact centre it had helped to set up for the Ministry of Housing, Communities and Local Government and the National Shielding Service to contact vulnerable customers who receive benefits or pensions solely through the Post Office accounts.
Among other things, the Post Office is providing contact-free cash payments by Royal Mail special delivery for users of these accounts during the coronavirus outbreak, she said.
Elsewhere, Coffey praised the work of the “hidden heroes” of her department supporting people hit by the Covid-19 crisis, as the latest statistics show more than 1.8 million claims for Universal Credit have been made since mid-March.
The stats, which run from 16 March to the end of April, show there have also been more than 250,000 claims for Jobseeker’s Allowance and 20,000 claims for Employment and Support Allowance.
This averages out at six times the typical volume of claims made to the Department for Work and Pensions, Coffey said.
The rate of claims for Universal Credit has now stabilised after a massive spike as people lost work because of the coronavirus outbreak, Coffey said. This peaked when DWP received ten times the usual volume of claims in one week, she said.
The department is now receiving around 20,000 to 25,000 UC claims a day, she said – amounting to around twice the usual volume of claims per week before Covid-19 broke out.
“I want to pay tribute to the civil servants in my department as well as contractors and partners who have been working tirelessly to provide help and support to those in need,” Coffey said. “They are the hidden heroes for many people in this country. They should take great pride in their hard work and dedication to supporting people through these difficult times.”
Addressing MPs in the House of Commons yesterday, Coffey said some 8,000 DWP staff and 500 other civil servants had been redeployed to process benefit claims. DWP permanent secretary Peter Schofield said in March that he expected 10,000 of his department’s staff to move to frontline roles during the crisis.
“Our payment timeliness for Universal Credit is running at a record high,” she said, adding that DWP has also issued some nearly 700,000 advances to claimants who felt they could not wait for their first routine payment and the vast majority of these claimants received money within 72 hours.
DWP has made a number of changes in the last two months to the way it handles claims and administers benefits to comply with social-distancing measures.
Jobcentres have been closed for regular appointments, and new phone procedures have been introduced to cope with huge call volumes.