What can lead to a pension card being blocked and how to restore access to the money

Situations arise in life when money from a pension card cannot be used. The reasons vary. For example, a bank may temporarily block the “plastic” for security reasons, so that criminals cannot gain access to the money. Card servicing may be temporarily suspended because the holder failed to contact the financial institution that issued it in time and update their personal data. In addition, there are cases when the bank itself, the State Executive Service, or a private enforcement officer restricts the use of funds in the account. 

Sometimes the problem is not with the card. These are cases when the Pension Fund  (PFU) stops transferring the pension, even though the bank account remains accessible. The reason determines whom to contact and which documents to prepare. 

Why pensioners may lose access to their money and how to restore it is explained by UNN.

Plastic card  and bank account: what exactly can be blocked for a pensioner

A pension card is a payment instrument that a person uses to access funds in a bank account. The money is held in the account itself, so if a person’s plastic or virtual card is blocked, the funds themselves will remain available. To use them as before, it will only be necessary to find out the reason for the restrictions and take all steps to eliminate them.  

If the bank has restricted the use of the card only, other ways of accessing the funds may remain available. For example, a person may be able to make a transfer using the account details or receive their payment at a bank teller’s desk. Everything depends on the reason for the block and the extent of the restrictions imposed.

A different situation is an attachment of funds. In this case, the ability to dispose of the money in the account is restricted, and replacing the card will not solve the problem.

The suspension of pension payments concerns the further transfer of the pension by the Pension Fund. The card may continue to work, and the holder may use the available balance. Therefore, the absence of a new deposit and an ATM’s refusal to dispense cash require different actions.

Why a bank may block a card for security reasons

A bank may restrict the use of a card if it has reasonable grounds to suspect that unauthorized persons have gained access to it. The purpose of such a decision is to prevent unauthorized debiting of funds. In particular, verification may be required when there are signs that the card has been compromised (for example, when fraudsters may have learned its details or someone carried out recent transactions with the funds without the holder’s consent). In this case, restoring access requires contacting the bank through official channels and completing the prescribed verification.

If the card details have in fact fallen into the hands of third parties, it is advisable to discuss reissuing the “plastic” with the bank. Simply restoring its operation does not eliminate the risk of the stolen data being used again.

Transactions may also become unavailable after a person forgets their PIN and enters it incorrectly three times in a row on an ATM screen or in the bank’s mobile application. In this case, the duration of the restriction and the procedure for restoring access depend on the rules of the particular financial institution. 

What happens after the card expires

The card’s expiration may also be a reason for a payment or cash withdrawal to be declined. However, this is not the same as blocking the account or suspending pension payments. First, one should clarify with the bank whether it has extended the card’s validity period and which transactions remain available. If the answer is negative, a new card should be ordered.

It is also worth checking separately whether the IBAN account number has changed. If a pensioner opens another account or switches to another bank, the new details must be reported to the Pension Fund. Replacing a card and changing an account are different procedures.

Outdated personal data: when this may lead to restrictions on using pension funds 

Banks are required to verify their clients and keep information about them up to date. Therefore, even a person who has been receiving a pension at the same bank for many years may receive a request to update their details, which they must comply with. In turn, the financial institution may ask them to confirm their passport details, address, or other information in the questionnaire, or to provide documents in place of those that are no longer valid. The specific list depends on the circumstances and the content of the request.

If a client does not provide the necessary information, the bank has the right to restrict debit transactions. Termination of the business relationship may also be possible on the grounds provided for by law. At the same time, the receipt of funds and the ability to spend them are different matters: under certain restrictions, money may continue to be credited, but it cannot be used until the verification is completed.

To avoid this unpleasant situation, notifications about updating personal data should be checked through the official app, contact center, or branch. At the bank itself, one should clarify the list of documents, the deadline for submitting them, and whether the procedure is available remotely.

Which transactions with a pension card may raise questions during financial monitoring

Even if a pensioner receives their lawful state payment on a card, this does not exempt other transactions on the account from financial monitoring. Banks analyze the movement of funds and compare it with information about the client, their income, and the nature of their use of the account.

Questions may arise if the amounts of incoming funds or transfers differ significantly from the person's financial activity known to the bank. In that case, the institution may request an explanation of the nature of the transactions and documents confirming the origin of the funds.

To resolve the issue, it is necessary to determine exactly which transactions require an explanation and provide documents that correspond to the actual circumstances. It is worth remembering that in such cases there is no universal document that automatically removes any restrictions.

Freezing of funds due to debts: where a pensioner should turn

A person's access to money may also be restricted במסגרת enforcement proceedings. One common reason is the compulsory collection of debts for loans, utility services, alimony, or fines.

In such a case, one should obtain from the bank the details of the enforcement proceedings and find out who imposed the freeze. Next, one should contact the state or private enforcement officer and review the decision.

If a pension is credited to the account, it is necessary to confirm the origin of the funds. A bank statement and a certificate from the Pension Fund may be required for this. With these documents, one should raise the issue of the legality of the freeze, its scope, and whether there are grounds for lifting the restrictions.

During martial law, an individual debtor may designate one current account for debit transactions within the limit of two minimum wages per calendar month. The calculation uses the minimum wage established as of January 1 of the relevant year. To exercise this right, a pensioner must write an application and submit it to the state or private enforcement officer who imposed the freeze. It allows the person to use part of the funds (equivalent to two subsistence minimums established by the Cabinet of Ministers in January of the current year — Ed.), but it does not cancel the debt and does not mean that the freeze will be lifted in full.

When the problem is the suspension of pension payments

If the card is working but the pension was not credited on the scheduled date, the reason must be clarified with the Pension Fund. They may, in some cases, suspend payment of the funds on grounds established by law. \Among these are the granting of a pension based on documents containing inaccurate information, failure to receive the granted pension for six consecutive months, or failure to undergo physical identification in cases where it is mandatory.

For persons temporarily residing abroad or staying in temporarily occupied territories, physical identification must be completed by December 31 of each year. The relevant rules have exceptions, including for payments made under international agreements.

For recipients residing in the temporarily occupied territories, the absence of debit transactions on the account for six months may constitute a separate ground for terminating payments if they also did not undergo physical identification during that period.

How to restore access to money on a pension card

The first step is to contact the bank and obtain a clear explanation of what exactly happened: whether the card was blocked, an individual transaction was declined, debit transactions were restricted, or the funds were seized. It is also worth checking whether the pension was credited most recently. Further steps depend on the reason. Security issues, PIN-related matters, reissuance, and updating personal data are handled with the bank. Restrictions in enforcement proceedings should be addressed with the enforcement officer, while the termination of pension payments should be addressed with the Pension Fund of Ukraine.

To resume pension payments, an application, supporting documents, and identification may be required. Available methods of identity verification include video identification and authorization on the Pension Fund of Ukraine's web portal via Diia.Signature. The specific procedure should be clarified depending on the grounds for terminating the payments.

If contacting the bank did not help resolve the issue, a complaint may be filed with the National Bank of Ukraine. To do so, it is advisable to retain the requests, the institution's responses, and documents confirming the circumstances.

Reminder

Earlier, UNN explained how to use an account under seizure during martial law.