Adjournment Debate. - Social Welfare Payments.
Mr. Broughan: The Labour Party believes that attempts by the Department of Social, Community and Family Affairs to introduce new methods of administering social welfare payments are sloppy, poorly thought out and have resulted in huge and unnecessary distress for social welfare recipients, particularly pensioners. Two weeks ago claimants received a letter from the Department of Social, Community and Family Affairs outlining new plans to transfer payments directly to bank or building society accounts. Alternatively, payments might be sent directly to the claimant by cheque. The letter carried the following notice: "It is essential that you reply by 8 May 1999 to avoid any interruption in your payment". That sentence in particular was highlighted by many of my constituents and by Labour representatives, who felt it caused unnecessary distress, particularly to those on disability benefit and senior citizens. They felt quite intimidated by the phrase and felt that there would be a cut in their payments and entitlements.
Many welfare claimants have not ever held a bank account or building society account and this type of letter has introduced a whole newmodus operandi and left them quite intimidated.
Last Friday it emerged that the Department had issued another letter, or so it told my office, indicating that if people so wished, they could retain the option of having their payment transferred to the post office. This action was obviously only taken after the Minister discovered that the system of informing people of the new changes in social welfare administration was seriously flawed.
We checked earlier today before this Adjournment debate and found that this second letter had not been sent to many parts of the country, so many social welfare recipients felt the position to be very chaotic, confused and uncertain. Sadly, this is the second major occasion on which the Minister for Social, Community and Family Affairs has presided over a major cock-up in his Department which resulted in major distress for claimants.
The Minister for Health and Children may remember that at Christmas his colleague, the Minister for Social, Community and Family Affairs was forced to backtrack on his plans to cut the Christmas bonus. While the Labour Party generally agrees with the need to introduce greater efficiency in the payment of social welfare payments, some understanding has to be shown of the problems facing many claimants. The lack of trust which many people, particularly older people, have in our banking system must be taken into account in any attempt to have people trans fer payments to bank accounts and the Minister should have included the post office option from the start.
As Deputy O'Shea said so effectively last week, and as the Minister for Health and Children will know from his constituency, the rural post office represents an important social centre for many communities. It is also the only retail financial outlet in some areas but rural post offices were badmouthed, perhaps libelled, in the Minister's circular. It infers that somehow cheques would be lost, destroyed or delayed in the post. However, the post office is not facing a committee in the same way that our largest banking group is facing the Committee of Public Accounts because of a failure to deduct the proper amount of taxation and other matters.
The Department of Social, Community and Family Affairs' attempt to cut out the rural post offices was a retrograde step taken in a confused and chaotic way. I urge the Minister to persuade the Minister for Social, Community and Family Affairs to admit his mistake, to send a clear circular to the 1.3 million people who depend on social welfare payments and to ensure this does not happen again.
Mr. Cowen: I have been asked by my colleague, the Minister for Social, Community and Family Affairs to take this Adjournment debate. The Department of Social, Community and Family Affairs provides disability payments to the value of £650 million to more than 140,000 people and their dependants each year. Traditionally, these people had their claims administered in a single location and were paid by cheque.
In 1992, it was decided to transfer 22,000 long duration disability benefit claims to the Longford office and to pay them by way of a payable order book. This action was taken to facilitate the development of a new computer system – the integrated short-term schemes system. It was intended that the transfer to the payable order book payment system would be temporary and that the claims would be put on the ISTS system when its development was completed.
The ISTS system has been in operation for some time. Consequently, it was decided that the long-term disability benefit customers' claims would be transferred back to Dublin and paid on the ISTS system.
The Department wrote recently to those recipients of disability benefit who are being paid by pension book – 11,700 customers – advising them of the transfer of administration of their claims from the Department's Longford office to Dublin. This transfer is being done with a view to providing better customer service and better management of the disability benefit system. Having all disability claims on the ISTS system ensures that all claims are subject to the same criteria for medical review.
The ISTS system, while it does not support payment by personalised payment orders at the post office, that is book payment, offers a wide and flexible choice of payment options as follows: postdraft payable at the post office; electronic fund transfer direct to the customer's bank or building society account or to a nominated account and cheque payment to the customer's home address.
Initially, as the Deputy is aware, only the electronic fund transfer and cheque options were offered to these customers. However, concerns were expressed about the loss of payment through the post office and the Minister instructed the Department to offer the option of postdraft payments to allow people claiming disability benefit to continue to collect their payments at the post office. Letters advising of this option were issued to all customers early this week.
The Minister is concerned to ensure that disability benefit customers are treated with all possible consideration and respect. Customers can be assured that the changes which are being made will result in an improved quality of customer service.