Prepaid solutions to Universal Credit
To many people until recently Universal Credit was not really ‘front of mind’, but with the high profile news, the glut of independent surveys, and parliamentary debate it has brought the issue front and centre. It has shown the current welfare system in all its glory and clearly its significant number of challenges even more paramount not only to local authorities and housing associations but the general public. It is fair to say the Government has not had an easy ride, but the principle objective of Universal Credit is still a strong one – it replaces lots of benefits with a single monthly payment, and it is designed so that claimants feel better by being in work!
The numbers are significant – there are 5.4m benefit claimants in the UK estimated to be affected by Universal Credit, however as of October this year 141k individuals were claiming Universal Credit, against an original target of 1m planned by April 2014, with the target for all claimants to be using Universal Credit by 2020. Clearly, the roll out has been slow and difficult, but the Government is determined to push this forward, and it also seems the right course of action as our welfare system is ‘creaking at the seams’.
Change always brings resistance and social welfare payments being provided through the use of a prepaid card has taken sometime to be adopted by local authorities. However, there are now 138 local authorities that use the prepaid card because the proposition has significantly developed with online banking solutions for the claimants, as well as safeguards for the local authority. Claimants can go onto their cardholder portal and see their balance, transfer money and make payments as if they had access to on-line banking as provided today. They can also use the card to purchase in shops, restaurants, and obtain monies at an ATM as if it was a current account operated by any high street bank.
For the local authority having a program that allows them to manage and provide cards through an on-line web portal, which can be tailored to the individual claimant’s social care needs, or groups of individuals offers the management needed to monitor their social care budget in these difficult times. Evidence has shown that local authorities make significant savings in administration and can redeem funds from a card where circumstances have changed – major benefits in getting the monies to the right people at the right time!
Therefore, in the case of Universal Credit, which has had a chequered history over the past decade we are finally starting to make progress. Initial evidence shows as demonstrated by the Winchester City Councils pilot, local authorities need to drive the agenda as Department of Work and Pensions will not. They see themselves as setting the policy and process for the initiative but expect local authorities to make it work against the backdrop of their local community and specific circumstances. Prepaid as one of the payment choices under the Care Act has shown its value as a positive payment route for this market place and continues to serve a wider audience. With multiple funding from different sources needed under Universal Credit this will provide both the best cost effective solution for both claimants and local authorities.
The race is on to provide the UK with a more efficient welfare system solution, with Universal Credit at the heart of that change. Using a Prepaid solution to support this meets all the requirements.
Kevin McAdam, Director of Prepaid at allpay Limited