Support for benefits to be on pre-paid cards

  • Support is growing for the concept of benefits being issued on to pre-paid cards, and most people think that the government should control how they are spent.

     Credit Card ChipThe cards would be much easier to administer than cash, and would help people who struggle to budget their spending, but should they be used to control spending? 59% of people think they should.

    The pre-paid cards are already taking off, with a quarter of all councils using them in some capacity, and those who use the cards are considering rolling them out on a wider basis.

    They have the advantage of being cheap to administer, and allowing people to use them in instances where cash is not accepted. They can also be set up so that money is put on every month, but that there's a weekly limit - so people cannot over-spend.

    They also raise the possibility of the council limiting the things people can buy with the card and a report by think tank Demos shows that the large majority of people think that these restrictions should be in place.

    However Demos say that this doesn't mean they should be, but more that it shows the Government are giving the public the wrong impression of people on benefits.

    The study showed that 59% of people think the government should be able to use them to control how benefits are spent. The research, conducted by the think tank Demos for Mastercard, found widespread support for pre-paid cards and additional control.

    Marion King, President of MasterCard UK and Ireland, says:

    The roll out of direct payments and the introduction of Universal Credit have the potential to increase financial inclusion, especially if the combined payment is loaded onto a pre-paid card.

    This is because the card will give access to more ways to pay for goods and services while simultaneously enabling individuals to budget and save.

    Prepaid cards can also provide local authorities with the ability to monitor and control spending where appropriate. The research found that overall 59% supported the idea of controlling how the universal credit is spent.

    However, there was even more support for keeping tabs on specific groups and particular sorts of spending.

    Some 87% of people said that at least one group of welfare recipients should have their benefits controlled. It included 77% who said yes to monitoring people with a substance or gambling addiction and 69% for those with a criminal or anti-social history. These figures rose to 82% and 75% respectively among respondents aged over 65.

    Certain types of spending were particularly frowned upon. Over two-thirds of respondents (68%) agreed the government should stop all recipients from spending their benefits on gambling.

    Over half (54%) agreed with the government stopping people spending their benefits on unhealthy items such as cigarettes or alcohol. Just under half (46%) opposed benefits being spent on expensive branded goods, 38% backed a ban on buying junk food and 35% believed it shouldn't be spent on holidays.

    Demos's Deputy Director Claudia Wood said:

    These findings paint a worrying picture of a nation divided between welfare claimants and the rest. It suggests that many now view the welfare state as a form of charity towards the poor rather than social insurance for all.

    If the majority still saw the welfare state as an insurance scheme - a contract of protection in return for contribution - then people would be more supportive of autonomy for benefit claimants.

    The government's rhetoric around 'problem families' and 'scroungers' is clearly shaking people's faith in the welfare state. Those wishing to restore it will need to find a response that reassures a nervous public.

    The report found that when people were asked a straight 'yes' or 'no' question, they supported controls. However, when the issue was brought into focus groups, there was far less support for controlling spending. People were more likely to think that the spending of other people should be controlled - but did not like the idea of having controls imposed on themselves.

    Source: Aol Money

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