Tuesday, 5 March 2013

Questions (89)

Michael Colreavy

Question:

89. Deputy Michael Colreavy asked the Minister for Social Protection when the social welfare contract, currently held by An Post, will be put to tender; and if she will make a statement on the matter. [9979/13]

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Written answers (Question to Social)

The contract for the delivery of cash payment services to customer which is currently with An Post, expires on 31 December, 2013. In anticipation of this, the Department is undertaking two public procurement competitions for the delivery of welfare payments. The first procurement competition is seeking over the counter cash services for social welfare customers. This procurement was publicly advertised on 20 December 2012 with a closing date of 18 February, 2013. The contract will be for a term of two years, which may be renewed annually, for up to six years in aggregate. The outcome of this competition will give rise to a contract to maintain continuity in the delivery of cash payments to the Department’s almost one million customers, whilst also putting in place arrangements to facilitate the transition from cash payments to electronic payments.

Given that an evaluation is currently underway, Deputies will appreciate it would be inappropriate for me to comment further on the procurement competition other than to say that the requirement for convenient access payment outlets and the standards of the customer service were specified in the published Tender. The Department envisages a future where all payments to our customers will be paid electronically. This is in line with the Government policies and objectives such as better public services, to improve the efficiency of the national payments environment and to modernise payment approaches in the economy. These objectives are aligned to the objectives of the National Payments Plan.

In Ireland a relatively low level, only some forty per cent, of social welfare payments are made electronically into a financial institution. This does not compare well with other countries where the level of social benefit paid electronically through an account is very high, in many instances close to one hundred per cent. Given the volume of payments issued annually, any progress made by the Department towards more modern and efficient payments approaches will bring benefits to both customers and the national payments environment generally. However, direct payment into a financial institution may not suit all our customers. For this reason, a supplementary approach is required to provide additional scope for electronic payments. In this context, the Department will be advertising a second procurement later this year for an ePayment solution. This ePayment solution will supplement existing levels of payments made directly by Electronic Funds Transfer (EFT) into customer accounts in financial institutions. I anticipate this procurement will be published before the end of June 2013.