The UK governments work and pension Minister Iain Duncan Smith has announced at the recent Conservative Party Conference that benefits for the unemployed and poor will receive per-paid cards instead of cash to limit in what he called problems with addictions such as gambling and drugs.
In a trial period for a select number of claimants the Minister said that pre-paid cards would stop people using the money to gamble and other addictive devices and make them spend the money on getting them back to work and providing for the family.
Mr Duncan Smith said that for a ‘significant’ number of people on benefits, the struggle to manage their household finances makes it harder for them to buy the essentials and to look for work.
At the conference he said: ‘I have long believed that where parents have fallen into a damaging spiral – drug, alcohol or gambling addiction, even problem debt, or more – we need to find ways to safeguard them – and more importantly, their families, their children, ensuring their basic needs are met.
‘That means benefits paid should go to support the wellbeing of their families, not to feed their destructive habits.
‘I can announce that I am testing prepaid cards, onto which we will make benefit payments, so that the money they receive is spent on the needs of the family – finally helping break the cycle of poverty for families on the margins, change we can be proud of.’
Under the new plan a trial of claimants in the north of the country will be issued with the pre-paid cards.
The government claims that families will be able to ‘take more control over their finances’ if they are restricted in what they can buy or use the funds for.
In this way people will be unable to buy alcohol, drugs and gamble but making the cards compatible only with a limited number of retailers.
Should the trial scheme work then it is planned to be rolled out across the whole country by 2018.