Payment of HB via Pre-paid debit cards

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  • #23388
    Anonymous
    Guest

    Hi,

    We are currently looking to move away from making payments to claimants via cheque (25% of claimants opt for this method over bacs), I have been tasked with the job of looking into pre-paid debit cards as an alternative method of payment?
    Ideally we are looking to reduce the associated costs of producing cheques to claimants.
    Does anyone have any experience of this, and how did you go about removing cheques as a payment option and pushing for 100% bacs? Is it just a case of updating the HB claim form, removing the option to pay via cheque?

    Regards,

    Matt

    matthew.riahi@wycombe.gov.uk

    #12295
    Kevin D
    Participant

    As no one else has responded, here goes.

    Several LAs are now trying to “impose” BACS payments. With varying success. However, the law makes it clear that regard must be given to the “…reasonable needs and convenience of the [b:ed1bcf27d6]claimant[/b:ed1bcf27d6]….” [[b:ed1bcf27d6]HBR 91(1)(b)[/b:ed1bcf27d6]].

    Note that reference is to the [b:ed1bcf27d6]claimant[/b:ed1bcf27d6] as opposed to the LA. Further, this consideration is not discretionary.

    I can offer one important scenario where a clmt may well prefer payment by cheque instead of BACS.

    If a clmt has a bank account that is dangerously overdrawn, any BACS payment could, in theory, simply be snaffled by a bank. Repayment of an overdraft can be demanded at any time and more or less instantly. Payment by cheque at least give the clmt an opportunity to make a judgement call as to whether any particular should go to a different account to safeguard it. With BACS, it is much more difficult for a clmt to stay in control of where the money goes.

    “Well, a clmt could ask for it to be paid by BACS into another account…” I hear a chorus say. True. But, that relies on an LA consistently acting promptly on requests for such changes. In my experience, that is only going to happen at a handful of LAs.

    My advice is to write to clmts, but make it clear (unlike one or two LAs) that while BACS is voluntary, it would be really really helpful if they will switch.

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