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Duncan Smith outlines plans for pre-paid benefit cards

media captionIain Duncan Smith outlines he pre-paid card plan

The government is to introduce pre-paid benefit cards to stop claimants spending their money on alcohol, drugs or gambling habits.

Work and Pensions Secretary Iain Duncan Smith said it would help those "on the margins break the cycle of poverty".

The cards could only be used for some items in some stores, and would not be valid in betting shops or off licences.

The scheme will be initially piloted on a voluntary basis and will be targeted on those with addiction problems.

The BBC's assistant political editor Norman Smith said government sources said the move was aimed at helping claimants with drug or alcohol issues and protecting their families.

The sources said an estimated one in 15 working-age benefit claimants in England suffer from addiction to drugs, such as crack-cocaine and heroin, while an estimated one in 25 working-age benefit claimants is suffering from alcohol dependency.

'Basic needs'

In his speech to the Conservative conference, Mr Duncan Smith said families in the "deepest difficulty" needed specific help.

"I have long believed where parents have fallen into damaging spirals of alcohol or drug addiction, or even problem debt, we need to find ways to safeguard them and their families and ensure their basic needs are met."

image captionAn estimated one in 15 working-age benefit claimants in England suffer from addiction to drugs

"That means benefits being paid should go to supporting the wellbeing of their families not to feed their destructive habits."

While the plans would initially be tested, he said he believed it would be "a change... that we as a Conservative government will be proud of".

The concept of a pre-paid benefit card has been championed by the Conservative backbencher Alec Shelbrooke, who first raised it in the Commons early in 2013.


He has called for claimants to be stopped from spending their weekly income on items that damage their health and increase the financial burden on the NHS.

Spending on cigarettes, alcohol and gambling - what he has described as "non-essential, desirable and damaging" goods - should be banned, he has argued.

The welfare state, he has said, is being abused by a small minority of claimants and it should return to its original philosophy of supporting those unable to work and offering a "safety net" to those not currently earning by paying for basic items such as food and transport.

He has said the cards - which would not apply to pensioners or those with disabilities - will act as a "last-stop deterrent" to those living off the state with no intention of working.


Mr Duncan Smith also told delegates in Birmingham that the Universal Credit would be accelerated in 2015, with a national roll-out of the consolidated benefit system in February.

The work and pensions secretary pledged to "finish" the much-criticised initiative, in which six working-age benefits are being merged into a single monthly payment, on schedule.

He also announced Neil Couling, the head of the UK Job Centre Plus, would take over operational responsibility for the scheme from Howard Shiplee.

He also promised to do more to tackle the "terrible scar" of youth unemployment, including sending Job Centre staff into schools.

In future, he said all 15-year olds at risk of becoming "neets" - not in education, employment or training - would have dedicated support from Job Centre advisers in their schools.

On top of a scheme announced on Sunday for 18 to 21 year olds out of work for more than six months to train as an apprentice, he said there would be a "single package of help" for all 15 to 21 year olds.

Earlier on Monday, Chancellor George Osborne announced a planned two-year freeze on working-age benefits to come into effect in 2016 if the Tories form the next government.