Scrapping of MiCards will provide an estimated saving to the Treasury of at least £500,000 a year.

The Isle of Man Government announced in October that the MiCard system, which allows individuals to collect their benefits or pension in cash at Isle of Man Post Office branches, will no longer be available by the end of 2025.

This move has been phased in and since the end of January new customers no longer have had the option to collect payments in cash.

Existing MiCard users are able to continue using the service until the end of next year, but they are being encouraged to switch to direct payments into their bank or online accounts before then.

In a Tynwald question, Ramsey MHK Lawie Hooper asked the Treasury Minister for details of cost savings and whether an equality impact assessment was undertaken in relation to the decision to end the MiCard service.

Dr Alex Allinson replied that £0.65m would be saved in relation to annual software support charges, maintenance charges and costs of counter transactions currently payable by Treasury for the MiCard facility.

However, this saving would be offset by the increased number of BACS transactions and by costs of an exceptional payments service for those unable to access a bank or on-line account.

This left an anticipated net saving to general revenue of at least £0.5m a year

Dr Allinson said he believed there would be positive impacts from the changes of the payment method for benefits.

He said: ‘As regards the elderly, disabled and frail they will no longer have to battle adverse weather conditions to go to the post office to collect their pensions or benefits.

‘Also, in terms of their safety they will no longer have to carry on their person sizeable amounts of cash. And they’ll no longer have to pay cash into their bank accounts to cover their standing orders, direct debits etc.’

Less than 5% of pensioners now collect their state pensions at a post office, the Minister said.

He added: ‘We have measures in place to help those who are genuinely unable to open a bank account, either in the short or longer term, in the form of emergency cash payments at a post office.

‘These arrangements will be in place until at least December 31 and proposals are currently being developed for this provision to continue beyond that date.

‘There is no reason to believe this measure will have a disproportionate impact in relation to any of the other protected characteristics under the Equality Act (i.e., gender, gender reassignment, sexual orientation, marriage/civil partnership, pregnancy/maternity, race, religion or belief).’

Of the 3,000 or so MiCard users the Social Security Division wrote to last November more than 800 have already switched to having their state pension or benefits paid directly into their bank or online accounts.

The division will be contacting the remaining MiCard users again this spring, to encourage them to switch.