Direct Payment – pensions, benefits and allowances
“Direct Payment into an account is the Social Security Agency’s normal way of paying pensions and benefits. It is a safe, convenient and efficient method of payment.
Advantages of using a bank / building society account
- Choice – using a bank or building society account offers the flexibility of withdrawing money from a variety of places when needed. This includes a wide range of banks and cash machines, and many high street bank accounts are accessible at the Post Office®.
- Convenience – paying benefits and any other money (such as wages, occupational pensions or personal cheques) into one convenient account helps keep control of finances and budgets more effectively.
- Discounts – paying bills by direct debit means customers can make the most of discounts offered by some utility companies such as electricity and telephone suppliers.
- Peace of mind – a fast and easy one-off set up to pay regular bills by direct debit means never having to worry about missing a payment again.
- Security – money is kept in a safe place, offering an easy and secure way of managing finances.
- Being “job ready” – many employers will want to pay wages into a bank account.
Post Office card account
The existing Post Office card account contract was due to end on 31st March 2010 but the Government has now decided that a new contract will be awarded to Post Office Ltd. The contract will run initially from April 2010 to March 2015. New customers can open a Post Office card account (if the account suits their needs and circumstances) and existing customers can continue to be paid into their Post Office card account.
Features of Post Office card account
- Customers are only able to withdraw their money during normal Post Office opening times. The Post Office card account does not currently provide ATM/cash machine access.
- There is no direct debit facility to allow customers to make savings on some of their bills and no interest is paid on balances in a POca.
- The Post Office card account can only be in the customers name; they cannot have a joint account. Under the terms and conditions of the Post Office card account, customers must have their benefit / pension paid into their own Post Office card account and not into someone else’s.
- The Post Office card account is not suitable if customers have different people collecting their money for them.
- Wages cannot be paid into a Post Office card account, so if a customer is looking for work they cannot show an employer that they are “job ready”.
Cheques
We have begun a process to replace the cheque method of payment. We will ensure that there will be suitable arrangements for those customers who use carers to collect their payments.
Limitations of using cheques
- Cheques are vulnerable to loss or theft and are not as secure as Direct Payment;
- Cheque provides none of the advantages of being paid into an account – see advantages of using a bank/building society account above.
- The decision to pay you by cheque will be subject to regular review.
Identification
Banks/building societies require customers to provide evidence of who they are and where they live when opening a new account.”
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