DWP delays Post Office Card Account closures to 2022: Pension & benefit claimants affected

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Pension and benefit claimants can utilise the POCA scheme to access their payments if they did not, or chose not to, have their income paid into a regular bank account. The DWP made plans over the last year or so to shift claimants to regular bank accounts as the Government closed the scheme but it emerged today that these plans will be delayed.

The DWP detailed due to disruption caused by the pandemic, the Government has been forced to extend the closure of the POCA scheme to November 2022.

This is being done to ensure everyone affected has time to make alternative arrangements. The DWP will be writing to all customers who currently receive payment into a POCA, telling them the service is ending and encouraging those who are able to open a bank account to do so.

Those who remain unable to access such services will be migrated onto a new Payment Exception Service, which allows them to choose how they receive their payments.

Guy Opperman, the Minister for Pensions, commented on these changes.

“Whilst the vast majority of pensions and benefits are paid directly into peoples’ bank accounts, some people prefer to collect their payments over the counter at their local Post Office,” he said.

“This extra time means we can support our most vulnerable customers to move to the payment method that will suit them best – even if that means making sure they can still get cash via the Post Office using a card from the new Payment Exception Service.”

The DWP explained under the new Payment Exception Service, pensioners and benefit claimants will be able to choose how they receive their payments. These methods include the delivery of digital vouchers via:

  • A SMS
  • An email
  • A unique barcode displayed on a mobile phone

In addition, all customers who are migrated from POCA to the new service will receive a reusable mag stripe plastic card, which can be used to receive their benefits in cash from more than 28,000 PayPoint retail outlets or 11,500 Post Office branches.

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In May 2020, Thérèse Coffey, the Secretary of State at the Department for Work and Pensions, made a statement in Parliament concerning how the DWP needed to react to coronavirus.

It was towards the end of this speech where Dr Coffey first highlighted the Government’s intention: “I can also inform the House today that DWP will stop any new benefit and pension claimants from using the Post Office Card Account (POCA) from May 11, as we prepare for the end of this contract.

“Uptake of accounts in the last year has been exceptionally low but in any event, given that the vast majority of people using POCA we believe already have a bank account, the cost of the contract is poor value for taxpayers.

“Current customers who currently receive payment through a Post Office card account will see no change and will continue to receive payment into their accounts for the remainder of the contract period. We can use the HMG Payment Exception Service for people who cannot access any bank account.”

Indeed, between January 2021 to July 2021, the number of active POCAs reduced from 590,000 to 382,000.

For those who want to close their POCAs, the Post Office details a P6703 form will need to be completed.

These are available at local Post Office branches or can be requested through the POCA helpline on 03457 22 33 44.

Once completed, the form will need to be taken to a Post Office Branch where it will be checked and forwarded for processing. The account closure process can take up to 10 working days to complete.

The Post Office warns it is important no money is left in a POCA before it is closed.

Where people do not close their POCA themselves, the Post Office will automatically close it for them and will write to them to let them know of the date it will close.

POCA holders can move their benefit or pension payments over to an existing bank, credit union or building society account by:

  • Calling the freephone number 0800 085 7133
  • Filling in the form sent with a DWP letter and using the postage paid envelope provided to return the form

To find out how different benefits will be paid going forward, claimants will need to contact the office paying out the support, which is usually the DWP or HMRC.

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