Postal-Order Pensions Are Secured Until 2029 for People Without a Registered IBAN: How to Switch to Bank Transfer Instead
The cabinet approved about 8.5 million euros so Social Security can keep paying pensions and benefits by postal order until 2029 to people with no IBAN on file. How postal orders work and the three ways to switch to bank transfer.
Pensioners and other Social Security beneficiaries who have no bank account on file will go on receiving their money by postal order until at least 2029. The Council of Ministers (cabinet) on Thursday approved a resolution allowing the Instituto de Gestão Financeira da Segurança Social (IGFSS, the Social Security financial management institute) to contract the issuing and payment of postal orders for pensions and other benefits for people with no registered IBAN, according to the Council of Ministers communiqué. The contract is worth about 8.5 million euros.
The Government called the postal order "an essential means of payment for the most vulnerable citizens". The communiqué does not say how many people are still paid this way, or which company will provide the service.
How postal-order payments work
Social Security can pay a pension in three ways, according to the Instituto da Segurança Social's (ISS, Social Security Institute) practical guide to the old-age pension: by bank transfer, by postal order issued by CTT (the postal service) and sent to the beneficiary's home address, or by cheque for some people living abroad. A postal order can be cashed at a CTT counter or paid into a bank. It can also be endorsed to another person, but only once.
Postal orders follow the same calendar as transfers. The payment dates on the Social Security portal list both methods: on 6 November, for example, the Prestação Social para a Inclusão (disability benefit) and the Complemento Solidário para Idosos (pensioners' supplement) are due by "transferência bancária" and by "vale de correio".
Switching to bank transfer
Social Security says bank transfer is "faster and safer". Anyone who would rather be paid into an account can register an IBAN in three ways, according to the ISS practical guide to changing personal data:
- Online, in Segurança Social Direta: log in with your NISS (Social Security number) and password, go to Perfil, then Conta bancária, then "Consultar e alterar conta bancária". A Portuguese or foreign IBAN can be entered, and you upload a bank document showing the IBAN.
- In person, at a Social Security service desk, with form MG 14 (Requerimento Registo ou Alteração de IBAN), a bank document showing the IBAN and a valid identity document.
- By post, to the Centro Distrital (district centre) where you live, stating the IBAN to keep active, with the bank document and a photocopy of a signed identity document.
In every case the bank document must show the beneficiary as the account holder. The new IBAN is used only after Social Security has validated it, and confirmation arrives in the Mensagens area of Segurança Social Direta.
People without a current account can open a serviços mínimos bancários (basic bank account) at any bank. The ISS guide puts its cost at less than 1 percent of the minimum wage a year. For many older residents in the interior the barrier is not the account but getting to a cash machine, which some councils are now tackling with their own Multibanco terminals.
