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Last Updated: Friday, 24 September, 2004, 12:59 GMT 13:59 UK
Direct payment 'works', says DWP
An elderly woman with a nurse
Vulnerable people who are unable to use an account will get "weekly cheques"
Most consumers are pleased with a new benefit payment system, known as direct payment, says a government report.

The Department for Work and Pensions (DWP) said 86% of those surveyed felt direct payments were better than order books and giro cheques.

The automated system pays benefits and pensions directly into bank accounts or through a Post Office account.

But the survey also showed that there was dissatisfaction with the new service - especially among older users.

According to the DWP, 13% of people using the new service thought it was worse than the old system.

Older people were also less enthusiastic about the new system's merits.

According to the DWP's figures, 93% of customers of working age were satisfied or very satisfied with the transfer process, but only 89% of pensioners were.

Work and Pensions Minister Chris Pond said the research vindicated the government's move to abolish order books and giros.

"Modernising a system which came in with ration books causes understandable concerns, but this research shows that the new system is proving popular."

Direct payments

The government wants all benefits, tax credits and pensions eventually to be paid through the new electronic payment system.

Order books are being phased out from October onwards and the government is in the process of switching people over to the new system.

All new claimants are automatically paid through direct payment.

It's time the Government woke up to the anxiety it's causing to thousands of others
Gordon Lishman, Age Concern

But vulnerable people who are unable to use an account will receive "weekly cheques", a move that has been criticised by pensioner charities.

"The new pension and benefits payment system may be proving popular with some pensioners but it's time the Government woke up to the anxiety it's causing to thousands of others," said Gordon Lishman, Director-General of Age Concern.

"Many older people manage their money on a weekly basis and delays in receiving a cheque through the post could leave them with little or no money while they are waiting."


The new automated system hit the headlines in August when a national computer fault prevented 200,000 people from withdrawing money from the Post Office card account.

The system had already crashed once before, in July, and another blunder had led to an estimated 25,000 people receiving double pension payments.

According to the DWP, as many as 8% surveyed said they had received at least one payment later than expected and 3% believed they had received a payment for the wrong amount.

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