Payment of benefits and tax credits

Most benefits arty usually paid by direct credit transfer straight into an account. This includes

• benefits from the Department for Work and Pensions (DWP)
• benefits from Social Security Scotland
• tax credits
• Child Benefit
• Guardian’s Allowance

If you have problems opening an account, or payment by this method will be difficult for you, see under the heading Difficulties opening or managing an account.

Council Tax Reduction is usually paid by a reduction in your Council Tax bill. Housing Benefit may be paid by a reduction in your rent if you are a local authority tenant, and it is sometimes paid direct to your landlord in other circumstances. Otherwise your local council will usually pay your Housing Benefit by cheque or into an account. If you ask them, some councils will agree to pay you by cheque instead.

When you claim benefit, the office which decides your claim will also decide how you should be paid. You cannot appeal about the way your benefit is paid, but if it causes you problems, you should complain.

For more information about complaining, see Problems with benefits and tax credits.

Payment into an account

The main method of paying benefits and tax credit is into an account by direct credit transfer (called ‘direct payment’). This means the money goes straight into an account in your name. If you make a claim, you will be asked for details of the account you want to use for your benefit or tax credit. If you have problems opening an account, or payment by this method will be difficult for you, see under the heading Difficulties opening or managing an account.

If you need information about direct payments of benefit or state pension, you should contact the office that deals with your benefit claim or pension. If you have had a letter from the Department for Work and Pensions asking for details of your account, the letter will give you a number you can ring for more information.

If you are claiming tax credits, you can call the Tax Credits Helpline on 0345 300 3900.

Types of account

You can have benefit or tax credit paid into:

• a standard bank or building society account (for example, a current account)
• a basic bank account (also called an introductory account)

Basic bank accounts are easier to open but do not allow you an overdraft. Some standard bank accounts and basic bank accounts will allow you access to money at a post office, but you should check with your bank or building society.

When you open any type of account, you’ll be asked to prove who you are and where you’re living. If you can’t show proof, you might not be able to open an account.

If you have a Post Office card account

It will be closed on 30 November 2022. Most benefits can continue to be paid into this account until then. If you get tax credits or Child Benefit, they can’t be paid into your Post Office card account after 5 April 2022.

You can call the DWP helpline to change the account your benefit or tax credit is paid into from a Post Office card account to a different type of account. You can also ask any questions you have:

Post Office card account transfers

Telephone: 0800 085 7133

Monday to Friday, 8am to 6pm

If you can’t get a bank or building society account

You can use the Payment Exception Service.

Using an existing account or opening a new account

If you already have a bank or building society account, you should check whether this is suitable for the payment of your benefit or tax credit. If it is a savings account or a mortgage account it may not be suitable. If it is a joint account, or an account which is often overdrawn, you may want to use another account instead.

If you can't use a bank account

You can't get cheque payments for benefits paid by the Department for Work and Pensions (DWP) or by HM Revenue and Customs (HMRC).

If you are unwilling or unable to open an account for payment of your benefit, the DWP will pay you using the Payment Exception Service.

The Payment Exception Service uses a system called i-movo. You'll be able to collect your benefit from a PayPoint outlet in local shops and newsagents. You can search for your nearest store on the PayPoint website.

The DWP will send you vouchers by text message, email or post. You'll need your voucher, a memorable date and proof of ID in order to collect your cash. The DWP does not need your agreement in order to pay you in this way, so if you cannot or do not wish to be paid into an account, the Payment Exception Service will be the only other option. Find out more about the Payment Exception Service  on the GOV.UK website.

HMRC can also send you vouchers by text message or post.

If you have difficulty opening an account you can also get help from your nearest Citizens Advice.

If you lose your entitlement to tax credits because you do not have an account, or if you have any difficulty getting paid other benefits because you do not have an account, you should get help from your nearest Citizens Advice.

Problems with direct payment

If you are being paid by direct payment and there is a mistake or delay because the bank, building society or post office have made an error or been inefficient, you should ask them to put it right. If the problem is still not resolved you should make a complaint. If the error or poor service is because of a problem at the Department for Work and Pensions (DWP), the local authority or HM Revenue and Customs (HMRC), complain to the office responsible for making the payment. If the error or inefficiency means you suffer financial loss, you may be able to get compensation.

Check how to complain to the DWP, the local authority or HMRC.

Check how to complain to Social Security Scotland on mygov.scot – you can contact them online or use their helpline.

Check how to complain about banks and building societies.

Problems with cheque payments

If you are being paid by cheque, and you do not receive it, or it is lost, stolen, or destroyed, you should get in touch with the office which paid it as soon as possible. You should also get in touch with the police to report the loss or theft.

If you have problems with your cheque, you can also consult an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.

Discrimination

It's against the law for you to be treated unfairly because of age, disability, gender reassignment, pregnancy or childbirth, race, religion, sex or sexual orientation when benefits or tax credits are paid to you. Also, the Department for Work and Pensions, Social Security Scotland HM Revenue and Customs and most local authorities have policies which say they will not discriminate against you because of other things, for example, if you have caring responsibilities. If you feel that you've been discriminated against when you are paid benefits or tax credits, you can make a complaint about this.

For more about discrimination, see our Discrimination pages.