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Prepaid Cards For Benefit Claimants Move A Step Closer

July 6, 2016

With many thanks to Benefits And Work.

The DWP have published the results of a new study which supports the introduction of prepaid cards for vulnerable benefits claimants.

The DWP carried out a pilot using prepaid cards in Kent. The experiment has been assessed by the Centre for Social and Economic Research at Sheffield Hallam University.

The prepaid cards can be used to withdraw cash and to make payments, set up direct debits and buy items online. Statements and balances can also be checked online.

In the pilot there were no restrictions on what could be purchased using the cards.

The study found that the cards were particularly useful for “people in debt whose benefits were otherwise being swallowed up by overdrafts or credit debt payments in their current bank account.”

The cards also provided “greater financial safety for a few participants who had been exploited by previous or current partners or peers in the past.”

For some claimants, the cards allowed them to buy cheaper products and services online and set up direct debits to reduce costs on utility bills in a way they had not been able to before.

You can download a copy of the full evaluation of prepaid cards report from this link.

Are prepaid cards a good idea or the start of a slippery slope towards preventing claimants decide how they spend their cash? Let us know what you think in the comments section below.

4 Comments leave one →
  1. ispeakitasitis permalink
    July 6, 2016 6:36 pm

    Pre paid cards have their uses but people must be given a choice to have one or not but it would be helpful to have a carers card in which a limited amount can be downloaded on to it and it can only be used to pay for things they the account owner has approved in advance like paying bills and buying food. The card should be limited to twenty pounds for food and the payment of bills which are coded in by the account owner.

  2. July 6, 2016 7:36 pm

    How are benefit claimants who are still living at home going to pay their parents board money? No parent, should have to fully support their children living at home. Will the government pay the parents to have a chip and pin machine installed so they can pay the parents their board money?

  3. July 7, 2016 8:49 am

    If, and only if there could be a guarantee that the card would not slip slide to the Australian
    Healthy Welfare Card then there is not much of a problem, however remembering the statements of IDS when this was floated then I am very worried. the moment the government introduces a restriction on where it can be used or whether cash can be withdrawn is the moment it becomes a means of control and a source of excess profits to the redeemer, it would mean that charity shops and market stalls, both sources of cheaper goods are out of bounds. The question is about whether we trust our governments for all time. I am afraid I don’t and so this proposal should be objected too at every level

  4. July 7, 2016 12:09 pm

    Rainbow Saver credit union along with many other credit unions already has a prepaid Visa Debit card which many people in and out of work use to receive their wages or benefits. Usage includes cashback at shops so there is access to cash as well as purchases. We chose to limit usage so it can’t be used for gambling or payday lender payments. Its very popular and low cost compared to most prepaid cards. Like others, I would worry if a DWP card excluded getting cash

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