(Updated 03/04/2023)
Payments of benefits & tax credits
Most benefits are usually paid by direct credit transfer straight into an account. This includes:
- benefits from the Department for Work and Pensions (DWP)
- 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.
How are my benefits paid?
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.
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.
Payment Exception Service
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.
