Vol. 528 No. 2
24 Mr. Broughan asked the Minister for Social, Community and Family Affairs if his attention has been drawn to the serious problems faced by social welfare recipients who do not have bank accounts in accessing their benefits due to revised bank rules on changing cheques and continued bank and building society branch closures. [29916/00]
My Department issues more than half a million cheques every month and is not aware of any systematic problems regarding the encashment of cheques by social welfare recipients. Cheques are but one of a range of payment methods offered by my Department and would account for about 11% of payment instruments issued. On very rare occasions it has happened that some individuals experienced difficulty in cashing their cheques because they had inadequate identification. These problems were resolved on a case by case basis.
Recently some banks introduced a policy whereby cheques must be lodged and cleared before value is given to the customer. Cheques issued by my Department are drawn on the Bank of Ireland which has given an assurance that the recent changes in its cheque encashment policy will not affect social welfare cheques. My Department has an ongoing arrangement with Bank of Ireland whereby social welfare cheques may be cashed at any branch of Bank of Ireland provided the bank is satisfied regarding the identity and bona fides of the customer. While exact figures are not available, it is reckoned that the majority of social welfare recipients cash their cheques at retail outlets and as such any change in bank practice does not impact upon them.
Cheques by their nature are more likely to be lost, stolen or fraudulently altered than would be the case with other payment instruments. An alternative for people would be to opt for the electronic payment method which is much more secure and efficient than cheques. If social welfare recipients should experience any difficulties in cashing their cheques arising from the closure of bank or building society branches, it is my Department's policy to ensure that alternative payment arrangements are made for them. If the Deputy is aware of any individuals who have experienced difficulties in cashing their cheques perhaps he would provide me with the relevant details and I will arrange to have those individual cases examined further.
I thank the Minister and his chief accountant who contacted me recently about this. There is ongoing concern, particularly in Dublin and Limerick, about the changes in the encashment policy of, specifically Bank of Ireland and AIB, but also of other financial institutions. Senior citizens, in particular, felt they were being refused by different branches or had to provide for example, a driving licence or passport type identification, which can very often be difficult in those circumstances. There is also the ongoing problem that urban post offices are inundated with people in receipt of unemployment assistance on collection day, and there are long queues for service.
People in receipt of back to education benefits say they were refused a service at their own Bank of Ireland branch and had to go to an entirely different branch. There seems to be a great deal of inconsistency in relation to the encashment of social welfare payments despite the improvements of recent years. Would it be possible for the Minister to come forward with a general policy on it?
The Minister referred to an ongoing bank and building society consolidation. In my constituency, a number of branches have closed offices. Bank of Ireland in Howth, for example, has closed and Bank of Ireland branches in Dublin central, Cabra and Stoneybatter have closed. Senior citizens have campaigned to prevent these closures but have failed. People feel they have been left high and dry. Perhaps the Minister with his colleague the Minister for Finance, will welcome the Bill being sponsored by my colleagues, Senators Joe Costello, Kathleen O'Meara and Brendan Ryan in the Seanad to amend the Central Bank Act to require banks to guarantee that certain locations would be facilitated, before licences are continued or are offered to them? In summary, will the Minister give us a general policy guideline on the whole encashment matter and on the electronic transfer system as it operates across the Department and will he support to the Labour Party Bill on the location of financial institutions?
This is the first I have heard of that Bill, so I will not comment on it. I could go into a lengthy list of the various payment methods of the Department. They are designed to give the recipient, as much flexibility as possible. The Department encourages people to use payable order books or the electronic fund transfer which is the safest method of payment. I am aware that the banks have tightened up a great deal. Much of this has to do with the issue of hot money and fraud in the system. However, it is only where they believe a fraud is being perpetrated and in relation to, for example, third party cheques. Social welfare cheques are always accepted. There is a long-standing arrangement between the Bank of Ireland and the Department, because that is the bank we use for these, that all these cheques will be accepted at their various branches. Individual bank officials have to be a little more careful because they are personally liable, and are under an obligation to assure themselves that the person who presents himself or herself is entitled to the money which he or she will pay out.
As far as I am aware and having checked with officials, there have not been any complaints to social welfare offices throughout the country about people having difficulty, but if the Deputy has any instances—
The time is up. We must proceed to Question No. 25.
