The Benefit Payments system is being changed by the government and for some, this could mean a worrying time particularly for those claiming key allowances.

Certain payment dates and frequency of payments are set to change from April 2009 until 2011. This forms part of a major overhaul of the whole benefits system being undertaken by the Department of Work and Pensions.

It affects those claiming income support, incapacity benefits, jobseekers allowance, severe disablement allowance; widows benefit and bereavement benefit. It does not affect those getting disability allowance, attendance allowance, or careers allowance.

The changes come in three main stages.

Firstly, if you currently receive your benefit, or allowance, paid one week in advance, then this will switch to one week in arrears. To cushion the blow of not getting your usual money for one of the weeks during the switch, the payment just before the change happens will add up to double your usual amount.

Secondly, the next change on the way is to make the payments fortnightly in arrears. To cover the week when you won’t be paid, you can apply for a short term loan of one week’s payments to keep you going.

You should have already been notified by post of these changes and it’s important you keep an eye open for this letter, as it will also tell you how to apply for the loan if you think that the payment changes will cause you financial difficulty. The loans will not be awarded automatically and they are based on the amount of one week’s payments. Repayment of the loan will then take place by six fortnightly payments directly out of future benefit payments.

Bear in mind that for many – who started claiming benefits after 1995 – they are already being paid weekly in arrears, and the change for them will be a move to fortnightly in arrears.

Thirdly, the day of the week that everyone gets currently paid will change. The new payment dates will now depend on an individual’s national insurance (NI) number. So, you need to look at the last two digits of your NI number. If it falls between 00 and 19, then your pay date will in the future change to Monday; 20 and 39, Tuesday; 40 and 59, Wednesday; 60 and 79, Thursday; and, 80 and 99, Friday.

This will have obvious effects for people who have in the past been paid say on a Monday, but might have a NI number which ends in 78, so will now be paid on a Thursday.

There is as yet no formal timetable for the introduction of the changes outlined above.

Guest Article by Neil Camp