HMRC urges benefit claimants to act as Post Office card accounts will close next week

HMRC has warned certain benefit claimants will need to act ahead of December 1 as Post Office card accounts are phased out. Specifically, this concerns Child Benefit and Tax Credits claimants.

Act before December 1

HMRC said: “Does your Child Benefit or Tax Credits get paid into a Post Office card account? If so, you’ll need to switch to a bank, building society or credit union for your payments to continue. Changes come into effect from December 1.”

All forms of benefit payments to Post Office card accounts are ending and HMRC will be sending letters to Child Benefit, Guardian’s Allowance or Tax Credits claimants. Claimants of other benefits will be contacted by the DWP.

Where people get a letter from HMRC, they will need to fill out the form that came with the letter or call HMRC to arrange for payments to be transferred to a bank, building society or credit union account.

This is important to note as if a claimant does not give HMRC their bank, building society or credit union account details by November 30, 2021, their payments will stop.

Child Benefit claimants will need to be particularly careful with this, as payments cannot be paid into a Nationwide Cashbuilder account (sort code 070030) in someone else’s name or a Payment Exception Service account. Also, Guardian’s Allowance or Tax Credits claimants cannot transfer to a Nationwide Building Society account in someone else’s name or a Payment Exception Service account.

READ MORE: Take care when gifting money to family – 5 mistakes to avoid

DWP extends deadline

While HMRC will be ending Post Office card account usage from next week, the DWP recently confirmed its deadline would be extended. The DWP was meant to phase out Post Office card accounts from November but in September, it announced the deadline would be pushed to November 2022.

The DWP said this was due to the disruption caused by the pandemic and to ensure everyone affected has time to make alternative arrangements. Claimants will be written to and those who remain unable to access different payment options 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: “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.

“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.”

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The DWP explained under the Payment Exception Service benefit claimants will be able to choose how they receive their payments. The methods available include the delivery of digital vouchers via SMS, emails or a unique barcode displayed on a mobile phone.

Additionally, all customers mitigated from a Post Office card account to the new service will receive a reusable mag stripe plastic card, which can be used to get their benefits in cash from more than 28,000 PayPoint retail outlets or 11,500 Post Office branches.

It should be noted there is no Payment Exception Service for benefits received from HMRC.

According to the Post Office, once a benefit or pension has been moved to another bank, building society or credit union account, or to the replacement voucher service, claimants will need to close their Post Office card account.

These cards can be closed by completing an account closure form, available from a local Post Office or from the Post Office card account helpline on 0345 722 33 44.

It is also important that claimants to not leave any money in their Post Office card account.

How and when are benefits usually paid?

State benefits are usually paid straight into a bank, building society or credit union account and according to the DWP, relatively few people utilise Post Office card accounts. Where payment dates fall on a weekend or bank holiday, the money will usually come through on the first working day before hand.

Most benefits are paid once every four weeks but some may be paid once a week or once every two weeks. When applying, claimants will be asked for a bank, building society or credit union account for the cash to be paid into.

Where claimants are overpaid, they must report it to the Government or face the risk of being fined or even taken to court. Claimants can also repay benefits or allowances they get but feel they do not need.

To do this, claimants will need to write to the department that paid the benefit and include a cheque made payable to the department, along with their National Insurance number and details of the payment, such as the date and the amount.

Benefits calculators

There are many benefits available to would-be claimants and as such, knowing what to apply for can be confusing. Fortunately, free-to-use benefit calculators are available to Britons. These tools can break down what benefits they’d be entitled to, how they can make a claim and how the payments will be affected if they start work.

These calculators are anonymous and have replaced the Benefits Adviser service previously offered by the Government. While the Government itself does not actually provide these calculators, it does highlight a number of suitable external options.

According to the Government, Policy in Practice, entitledto and Turn2us all offer helpful benefit calculators. When using these calculators, users will need to provide certain information which includes details on their savings, income and outgoings.

While these calculators are available to most of the public, those aged under 18 will not be able to use them. Additionally, they will not give accurate results for those who are prisoners, students, not a British or Irish citizen, on strike, living outside the UK or living permanently in residential care or a nursing home.

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