27 January 2017
Withdrawal of cash cheques in tax credits and child benefit from 31 March 2017
Currently, tax credit and child benefit claimants who have not provided account details can receive payment via cash cheque.
HMRC say that these cash cheque payments do not fit into the wider HMRC payment strategy for all customers to be paid direct into a bank account, building society account or a credit union.
HMRC will no longer be able to issue cash cheques for tax credits and child benefit from 31 March 2017.
Also, cash cheques will no longer be cashable at the Post office from 30 June 2017.
In order to continue to get payments claimants will need to provide bank account details. For new claimants who do not provide bank account details with their claim, HMRC will write to them requesting details. HMRC are also contacting all existing claimants who currently receive payments via cash cheque, alerting them about the change and asking for bank account details. HMRC are also checking their systems to see if they already have details of bank accounts which other benefits are paid into and where that is the case, HMRC will automatically update tax credit and child benefit to pay into that account.
HMRC are also making claimants who do not want payments made into an overdrawn account aware that the wider banking community have signed up to the principle that benefit payments cannot be used to offset a debt, advising them to alert their bank if this happens so money can be refunded.
There will be an emergency payment solution for claimants who genuinely cannot open or operate an account or who are unable to provide HMRC with a trusted third party account. Whilst this is not replacing cash cheques, it will allow payments to be made to a small number of claimants who meet strict criteria. HMRC are currently sourcing a supplier for this product, which is anticipated to be paperless and expected to be accessed via a personal teller service or ATM cash machine.
HMRC are also expected to introduce faster payments to administer immediate hardship payments directly into a claimant’s nominated bank account.