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Volume 978: debated on Thursday 14 February 1980

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asked the Secretary of State for Social Services if he intends to review the definition of industrial misconduct as a cause of denying payments to an out-of-work person; and if he is satisfied that modifications more favourable to the individual concerned are not warranted.

The Social Security Act 1975provides that a person who has lost his employment through his misconduct is to be disqualified for receiving unemployment benefit for up to six weeks, but the Act does not define "misconduct". The independent adjudicating authorities, who determine all claims to unemployment benefit, decide, on the basis of case-law derived from the reported decisions of national insurance commissioners and in the light of the particular circumstances of each case, whether a claimant's behaviour constitutes misconduct and if so for how long he should be disqualified. I am satisfied that these arrangements constitute the most appropriate means of achieving a fair result for claimants.Supplementary benefit legislation provides that benefit is to be reduced during disqualification for unemployment benefit or if, in the opinion of the Supplementary Benefits Commission, the claimant would be disqualified if a claim to unemployment benefit had been decided. When the Social Security Bill becomes law, it is intended that regulations will provide for such questions to be referred to an insurance officer, the first of the adjudicating authorities, for a decision.

asked the Secretary of State for Social Services what representations he has received on the Rayner report regarding the proposals to pay pensions and benefits by means other than weekly payments at post offices and sub-post offices; and, in view of the concern which the proposals are causing to pensioners, disabled and other beneficiaries, whether he will make a statement.

asked the Secretary of State for Social Services what compensation arrangements are being negotiated between his Department and the National Federation of Sub-Postmasters in respect of the proposal to pay social security benefits fortnightly, or through bank accounts.

Representations have been received from the National Federation of Sub-Postmasters, the Association of District Councils, several local authorities and other organisations as well as from some members of the public. I am glad of the opportunity to reassure the hon. Member and the rural areas of the country that the Government have taken no decision to change the arrangements for paying social security benefits.The Government asked Sir Derek Rayner to improve the efficiency of their own activities. As part of this campaign, each Department was asked to carry out a critical review of an area of its activities. The Department of Health and Social Security has examined the arrangements for paying social security benefits, including the frequency of payments and whether people should be able to choose to have benefits paid direct into bank accounts if they wish. As a result of this review, Ministers are considering a number of proposals that would provide wider public choice and better value for money for the taxpayer, who, at present, meets the cost of the £250 million spent each year on making individual social security payments.The Government will not make changes in the arrangements for paying benefit without the most careful consideration and consultation with all those who would be affected, including the effect on sub-post offices. This review in no way reflected doubt about the quality of the service provided by sub-postmasters. My right hon. Friend the Prime Minister has written to the National Federation of Sub-Postmasters to assure it that the Government recognise the valuable service that sub-postmasters throughout the country provide to the community, particularly in rural areas.The Government's objective is to see that the arrangements for paying social security benefits strike the right balance between the claims of beneficiaries and taxpayers. In doing this they cannot ignore that, although the overwhelming proportion of benefit payments are made weekly, about two-fifths of the working population—including 50 per cent. of working women—and most occupational pensioners are paid monthly. Over 90 per cent. of the unemployed are paid their unemployment benefit and the associated supplementary benefit fortnightly; and over a half of mothers already cash their child benefit fortnightly or less frequently. At present, benefits cannot be paid direct into a bank account or other account although about half the population use a current bank account about three-quarters use some other form of account. Moreover, in the other EEC countries—except Ireland—and North America, retirement pensions, family benefits and most other social security benefits are paid monthly or even less frequently.The Government recognises that some people will need to continue with weekly payment of benefits across Post Office counters. They have no intention of requiring anyone to have benefits paid directly into a bank account. However, it does not seem right to continue to impose the present method and frequency of payment on everybody, when there are growing numbers of people who are used to being paid monthly through a bank account, and to budgeting on a monthly basis, and who would prefer to receive their social security benefits in a similar way.The Government intend to publish the proposals emerging from this review so that there can be appropriate consultations with those affected by any changes that might be made before final decisions are taken.