NPC Briefing on the Replacement of the Giro Cheque
March 2012
The new system to replace the giro cheque for pension and benefit payments will be phased in between April and September 2012, and many pensioners have already started to receive letters from the Department for Work and Pensions advising them that giro cheque payments will be stopped.
Those who currently receive payment by giro cheque have a number of options as to how they wish to receive their state pension/benefits in the future. This can either be done through using bank/building society account, Post Office Card Account or the new Simple Payment Service operated by Citibank and accessed through Paypoint terminals.
Opting for the Simple Payment Service to use at Paypoint will mean the following:
· Individuals will receive a card (about half the size of a debit card and possibly with a hole in one corner so it can be kept on a keyring)
· The pension will be transferred electronically to the card every week or month (whichever you have chosen)
· The pension can be cashed in one or more multiples of the weekly pension (depending on how many are on the card)
· There will be no time limit (unlike the giro cheque where there is a one month limit on encashment)
· Together with the card you will need to take identification (in the same forms as for the giro cheque) with you to the Paypoint
· You will also need to give some memorable information either verbally or written on a piece of paper to the cashier. This could be your date of birth or place of birth
· If the card is lost (or not returned by a carer) it can be cancelled by phoning the customer services number or visiting the website.
· 23,000 local shops have terminals including almost all branches of the Co-op, 350 Sainbury’s locals, 50 Asda locals, Costcutters, Spa and Budgens
If you have a regular carer or multiple carers:
· A regular carer/family member can be supplied with their own token to use with their own identification to collect the pension on behalf of someone else
· In the case of multiple carers the individual will need to give the carer their token plus identification in order for them to collect the pension on their behalf. The cashier should record on the system who collected the pension
Issues of concern
1. There is less privacy and security cashing the pension in a local shop than at the Post Office.
Answer: At most Post Offices the queuing system is just the same as in a shop, you don’t get a ‘one to one’ with the cashier in any POs except those in large cities.
2. Why should you have to divulge to everyone in the queue your date of birth or other memorable information?
Answer: You can write it on a piece of paper and hand it to the cashier.
3. The memorable information shouldn’t be restricted to just numbers i.e. a date of birth. If it is necessary to pass on such information it should be as wide and flexible as possible for people to choose what they want to use.
Answer: Most people who have been asked think their date of birth is most memorable.
4. What if someone else collects the pension and the cashier ‘overrides’ the system and does not record who collected the pension?
Answer: The cashiers will be trained and will have to go through the various stages before making the payment. (However there was no guarantee that the system would actually prevent an override).
5. What if there is not a local Paypoint terminal in the area?
Answer: There will be a requirement on Citibank and Paypoint to put a terminal into an area where there is no coverage (the exact distance was unspecified).
NPC view
When the government originally withdrew the pension book, many older people opted to receive their state pension by giro cheque because it was more convenient and it enabled them to support their local post office. Given all the changes that have since taken place, individuals will have now decide which payment option best suits their personal circumstances.
Those with an existing bank or building society account may decide to have their pension paid into it. For the vast majority, they can still access these accounts at the Post Office as well, if it is more convenient to do so.
Those without a bank or building society account may wish to open a Post Office Card Account or alternatively opt for the new Simple Payment Service (outlined above).
The NPC has always maintained that there must be an easy method of payment for those without a bank or building society account, that also meets the needs of those with multiple carers, and we will be monitoring the introduction of this new payment method to ensure it does not leave anyone disadvantaged.