A cashless society: the other side of the coin …

A cashless society: the other side of the coin …


Written by: Anne Singh

As the seasonal festivities get into full swing, campaign and support groups are stepping up their lobbying against the Azure card – a cashless payment system for asylum seekers – which leaves thousands in extreme poverty.

‘Section 4 support’, as set out in Section 4 of the Immigration and Asylum Act 1999, provides for limited financial support to be provided to asylum seekers whose claim has been refused but who are still unable to return to their country of origin and who would otherwise be destitute. In order to receive this support, refused asylum seekers must move into accommodation provided by the UK Border Agency (UKBA). At the end of June 2010, 6,750 people plus their dependants were in receipt of Section 4 support.


A voucher scheme for refused asylum seekers was (re)introduced at the end of 2005. The vouchers were accepted in a limited number of stores to pay for ‘essential’ goods (food, toiletries) only, and could not be exchanged for cash. The principle behind the voucher scheme was to make failed asylum-seekers’ lives as intolerable as possible to ‘encourage’ their voluntary return.

The voucher system was heavily criticised by campaign and support groups as causing considerable hardship and distress as people had no cash to pay bus fares to see their legal representatives or attend health care appointments and were unable to buy food that met their dietary, religious, or cultural requirements.

In late 2009, the voucher system was abolished principally on the grounds that it represented poor value for money and, according to the UKBA, was open to ‘abuse and fraud’. The ‘abuse and fraud’ complained of by the UKBA was principally national and local charities and support groups – including the Jesuit Refugee Service (JRS) – who would exchange vouchers for cash to relieve the worst excesses of hardship.

The Azure card was introduced in November 2009 to replace the use of supermarket vouchers. It was introduced without any pilot but was proclaimed the definitive solution to the problems with vouchers. However, the Azure card has done very little to resolve these problems, continuing to restrict where and when people are able to shop, what they are able to buy, and often not working at all. From the start, the payment system was exposed as costly, inefficient and ineffective. The JRS highlighted this anticipating that, in addition to implementation costs, it would cost £200,000 per annum just to administer.

The Azure card is topped up ‘automatically’ each week by the UKBA and can be used in a limited number of supermarket outlets. Section 4 support is currently set at £35 per week for a single person (compared to £65.45 per week Job Seeker’s Allowance – for over 25s). It cannot be exchanged for cash and only £5 can be carried over to the following week. This means that if an individual is unable to travel to the designated supermarket within the week s/he will automatically lose £30.

A response to a Freedom of Information request made by the Northern Refugee Centre (NRC) disclosed that a staggering £10 was being lost every week by each person using the card as a result of card malfunctions and deductions by UKBA. In the peak week of payments in July 2010, 1.184 of the 6,199 asylum seekers receiving the payments through the card suffered deductions at the end of the week.

Whilst the UKBA is allowed to reduce money on the card down to £5 (for those without children), the average value of the deduction per user is £9.62. This could indicate that those on the cards are finding it even more difficult to budget than with the previous voucher system.

Often the card does not work or is not accepted by the supermarket, leaving (humiliated and distressed) people unable to buy food for themselves and their children. The figures we obtained by NRC also show that in March 2010, as cards were being more widely introduced, 22,717 transactions were refused at the point of purchase due to insufficient funds. The commonest cause was that asylum seekers would have credit, but tried to purchase above the limit on their cards. If the amount to be purchased is even over by a penny, the whole transaction is refused.

Figures for that month show that between 16 and 19 per cent of transactions were refused because of insufficient funds – i.e. one in six of attempts to use the card were met with the card being refused because of lack of funds on the card. This causes embarrassment to the asylum seeker, stood at the till and told that they could not have the food they were trying to buy. The number of refused transactions has now dropped to just over 7,000 per month – but this is still an average of three refusals for every two cardholders.

The Azure card can only be used in a limited number of supermarkets. There is only one card provided per family unit and like the vouchers it cannot be used to obtain cash, making it impossible for people to pay for travel and other essentials not available at supermarkets.

Information on the balance on a card can be obtained through a freephone number, but even this is difficult as even presuming an asylum seeker can afford a phone, few can afford to top up in order to be able to make outgoing calls.

The Refugee Council recently released a damning report on the Azure card, Your inflexible friend: the cost of living without cash. They found that:

  • Without access to cash, over half (56 per cent) of respondents could not pay for travel to see their legal advisers, or attend essential health appointments (53 per cent), for example, if an individual or their children are sick outside their local GP opening hours, they do not have the money to get to a clinic or hospital.
  • 40 per cent were unable to buy food that met their dietary, religious, or cultural requirements in the specified supermarkets, and many experienced hunger and malnutrition as a consequence.
  • 39 per cent believed the supermarkets do not offer good value for money, and that they would get better value at a market or charity shop.
  • The administration of the payment card system has left people without the funds they need to buy food. 60 per cent had experienced the card not working, including thirteen people with children, and 79 per cent reported that shop staff had refused the card, despite being in the specified supermarkets.
  • 56 per cent reported feelings of anxiety and shame when using the card. The payment card identifies the user as an asylum seeker and exposes him or her to racist behaviour and stigmatisation.

The report exposes the serious failings of the Azure card payment system and the enforced extreme poverty and deprivation caused by a the failure of the UKBA and its contractors. The Azure card payment system means that individuals are unable to:

  • Buy enough or appropriate food to feed themselves and their children;
  • Buy essential non-food items, including non-prescription medicines, household cleaning products and children’s clothing;
  • Manage their budget effectively, meaning money is wasted;
  • Travel to access essential services including legal advice and medical care.

The Azure card has abjectly failed to alleviate any of the inherent problems of a cashless payment system which means already vulnerable people are faced with turning to dangerous, exploitative and illegal ways of obtaining cash to meet their basic needs and those of their families. There is evidence of these pressures resulting in begging, prostitution or selling goods for less than face value. Meanwhile, between June and September 2010, UKBA recouped over £86,000 in ‘capped payments’ on Azure cards.

To be entitled to ‘section 4 support’, asylum seekers must show that they are unable to return to their country of origin and that they are destitute. A support system which denies people access to cash support and which keeps them in extreme poverty is inhumane and degrading but moreover it fails to meet the UKBA’s stated objectives of encouraging returns. It serves only to reinforce the government’s propaganda agenda that asylum seekers are willful scroungers who must be publicly outed and kept on the very margins of society.

Related links

Northern Refugee Centre: ‘Card deductions hit poorest asylum seekers’

Read the Refugee Council report Your inflexible friend: the cost of living without cash here

The Institute of Race Relations is precluded from expressing a corporate view: any opinions expressed are therefore those of the authors.

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