Universal Credit (Credit Unions) – Parliamentary Written Answer

Mr Love: To ask the Secretary of State for Work and Pensions what arrangements are in place to allow for the payment of universal credit to those without a bank or building society account; and if he will make a statement. 

Esther McVey: For those without a bank or building society, the Department can pay universal credit into a credit union current account, Post Office card account or by Simple Payment. A Simple Payment is a cash transfer service, which has been designed to pay those people who DWP cannot pay into any type of account.

Tenants 'Not Confident' About Direct Payments

One in three social housing tenants on benefit are not confident they can keep up to date with rental payments if they receive their benefit direct, a report has found.  Optimising welfare reform outcomes for social tenants, published by the NHF and consultancy Policis, draws on a range of data to look at the potential impact of universal credit.  The report found 35 per cent of social tenants on benefit are not confident they can pay their rent once they receive payment direct.  More than half (54 per cent) feel a shift to monthly benefit payment would make it more difficult to manage their budgets.  Eight in 10 (79 per cent) tenants said they will find it more difficult to manage money monthly while 86 per cent believe it is better for benefit to be paid to the landlord.  A total of 14 per cent of tenants do not have a bank account with a direct debit function, while 5 per cent have no bank accounts at all.  Download the report form the NHF website.

Jury Out On State-Sponsored Bank Accounts for Universal Credit

Housing associations have given a cautious welcome to Government plans to subsidise for a year bank accounts that would help claimants manage monthly payments under Universal Credit.  The DWP is set to appoint one or more payment suppliers to offer jam jar-style accounts – which allow people to split their benefit into separate pots for spending, saving and bill payments – that would be offered when claimants sign on to Universal Credit.  The theory being that from October next year, new Universal Credit claimants will have their circumstances assessed by the DWP and, if necessary, will be offered special “budgeting” accounts. Those offered the accounts will be those for example exposed to debt and who feel unable to manage monthly payments. Those without bank accounts but who feel confident to manage monthly payments could be sign-posted to a basic bank account.  Read more on 24dash.

Universal Credit – Parliamentary Written Answer

Stephen Timms: To ask the Secretary of State for Work and Pensions pursuant to the answer of 24 April 2012, Official Report, column 794W, on universal credit, what options he is considering to ensure that universal credit is payable to people without a bank account.

Chris Grayling: Wherever possible, universal credit will be paid directly into a claimant's bank or building society account. Facilities such as direct debits and standing orders are important tools for helping claimants to managing their benefit payments and for gaining access to discounts for household bills which are especially important for those on low incomes. We are working with a range of banking and financial product providers to encourage more claimants to use a bank account for managing their earnings and benefit income.  For those claimants who cannot access any form of bank account the Department has signed a seven year contract with Citibank, working in partnership with PayPoint to provide a new Simple Payment service as an alternative to cheque payments. The Simple Payment service is based on the electronic transfer of funds in the same way that the BACS system works for direct payment into a bank/building society account and has been designed specifically for those people who are unable to make use of mainstream bank accounts.