Vol. 432 No. 4
53 Mr. J. O'Keeffe asked the Minister for Social Welfare the number of applications by pensioners to change over to the system of direct payment; whether the five week gap between the last payment of pension book and the first payment is considered to be a disincentive; the situation which would arise on the death of a pensioner who has opted for direct payment; and if he will make a statement on the matter.
My Department has recently offered a facility to old age contributory and retirement pensioners to have their pension payments paid directly into a bank or post office savings account. This is part of my programme to improve services to the public and introducing payment options for social welfare customers.
Up to now pensioners had no choice but to collect their pensions each week at post offices. Under the new arrangement, pensioners can, instead opt to have their payments credited to their accounts, at a bank or post office, at four weekly intervals.
To date, 5,200 pensioners have opted for the direct payment facility. This represents a 4.6 per cent take-up rate of those offered the facility, which is in line with experience elsewhere.
Pensioners not opting for direct payment will continue to receive payment by pension book at post offices as always.
It is necessary that payments under this arrangement should be made in arrears. This ensures that my Department has adequate time to respond to any change in pensioner circumstances before the next payment is made. I understand that similar arrangements operate in other countries.
Because pensioners are currently paid one week in advance the first direct payment will be made five weeks after the last payment by way of pension book. All subsequent direct payments will be made every four weeks.
Pensioners opting for direct payment of pension are advised that payment will be made four weekly in arrears. The new arrangements suit many pensioners particularly those coming from the workforce, many of whom are already paid monthly in arrears.
The new facility is entirely optional and a pensioner may decide whether or not this method of payment suits their circumstances.
As a once-off incentive in 1993 to contributory old age and retirement pensioners, my Department is offering £50 in prize bonds to those who opt for the new payment method during 1993. This applies whether they opt to have their payments made to a bank account or post office account.
