Dáil Éireann Debate, Wednesday - 24 June 2015
5. Deputy Aengus Ó Snodaigh asked the Tánaiste and Minister for Social Protection if she will withdraw new social protection forms encouraging persons to abandon their local post offices in favour of financial institutions, when dealing with social welfare transactions. [24849/15]
View answerI have tabled this question to call on the Minister to withdraw the new social welfare forms which are currently recommending that customers use the commercial banks to receive social welfare payments rather than their local post offices. If the Department continues in this way, it will further undermine local post offices, especially in rural areas.
I emphasise that the forms provided by the Department to enable customers to apply for social welfare entitlements are continuously reviewed to ensure they are amenable, relevant and understandable to all customers. In this context, the Department considers that the forms should reflect the choices being made by new customers - the forms in question relate to new customers - on what payment channel they opt for. The fact is that more and more of the Department's customers are opting for payment of their social welfare entitlements directly into their bank accounts, particularly people who are retiring on a contributory pension who already have bank accounts and typically received their wages or salary through their bank accounts. Almost always, they want to continue the bank account arrangement.
To ensure that the Department's forms present payment options equally I have asked the Department to update them to ensure that a neutral wording in respect of payment options is provided and to ensure that one payment option is not favoured over another.
The Government has consistently stated its commitment to maintaining the post office network. It is clear in the programme for Government. It is a key piece of social infrastructure in urban and rural areas. It is Government policy that An Post will remain a strong and feasible company in a position to provide a high-quality postal service that will maintain a nationwide customer-focused network of post offices in the community.
My Department relies on An Post to provide a payment service for people who do not have a bank account. I cannot emphasise that enough. The Department is heavily reliant on An Post. This, in turn, provides An Post and post offices throughout the country with some valuable business. For example, we are paying An Post approximately €54 million this year for services, a significant sum of money and a vital source of income for post offices throughout the country. That is our commitment to the network.
Additional information not given on the floor of the House
The post office network business development group, chaired by Bobby Kerr, has decided that the future of the post office will be best secured through the development of a more sustainable business model, including the development of financial services, which is identified by the group as fundamental to the future of the post office network. The development by An Post of a payment account will be critical to a more sustainable business model as society inexorably moves to electronic rather than cash payments. The post office network cannot remain reliant on an income stream from my Department for cash payments to its clients where an increasing number of social welfare recipients wish to receive payments to their bank accounts.
The Minister mentioned €55 million. That is paid to An Post rather than the post offices. It is a pity that An Post does not pay it to the post offices directly, but that is a different matter.
I have a social welfare form here - the Minister has seen some of these forms - and it states that the Department recommends direct payment to the customer's current, deposit or savings accounts in a financial institution. That is the first port of call. It is only if a customer does not have an account in a financial institution that the Department asks the customer to indicate the post office where the customer wishes for the payment to be made. That is a direction from the Department rather than an option. That is a change in the way the Department works.
I have given out before about how Tús workers must have a bank account to receive their payment from the Department of Social Protection. The payment is not facilitated through the post office service. If the Department continues this migration then the contract will obviously drop substantially. The Minister should bear in mind that most people receiving social welfare payments in the State are usually dependent on it. If the Department starts making them go to financial institutions it will impose an extra cost on them which is not on them at the moment with An Post. There are transaction costs in most financial institutions.
The bulk of social welfare payments go to our pensioners and to families for payments like child benefit payment. I imagine Deputy Ó Snodaigh goes to the post office to collect his child benefit but, increasingly, many families, individuals and pensioners already have a bank account and they opt to use their bank account. Is Deputy Ó Snodaigh suggesting that we should force people not to use their bank account and to use the post office option? I do not believe that, as a Government, we can do that. What we can do and what the Kerr group has recently recommended - I strongly support the proposal - is that there should be a standard bank account.
As a result of the collapse of the banks the development of the standard bank account fell behind. As I have said on many occasions, if the post office system had a standard bank account then the post office would be able to provide a composite range of financial services. This applies in rural Ireland particularly and in urban areas, including in my constituency and the constituencies of Deputy Ó Snodaigh and Deputy O'Dea, where there are no banks on the local main street. I have conveyed this view to the Minister for Finance, Deputy Michael Noonan.
There is a substantial change in the Department's documentation, giving more prominence and a direction to commercial banks. This is what is available in Ireland at the moment. If the Department changed the form to indicate that if the customer does not wish to indicate a post office, he or she could indicate a financial institution, then it would be a difference and would recognise the prominence that has been given to the post office and the postal service in this country in terms of social welfare payments over the years. It does not prevent either pensioners or those in receipt of child benefit from getting payment in a financial institution, but it is a difference of emphasis. The Department needs to look at that.
There is an extra cost on senior citizens or anyone using banks in this country. In the past I was with EBS and I had free banking. I do not have that anymore because the State took over AIB and EBS and every transaction now has a cost. I can sustain that, but those on social welfare do not necessarily have the ability to sustain an extra cost.
The last question was to do with fraud. One of the quickest ways to deal with fraud is for a social welfare customer to present in person to the post office with a card. In that way the customer has a one-to-one transaction with an official, whereas banking can be done anonymously and there is no need to have that interaction.
I hope Deputy Ó Snodaigh is not suggesting that 600,000 families should queue at a post office to get their child benefit. What we want is to give people a choice.
Exactly, I have read out the choice on offer.
Sorry, Deputy, the Minister has the floor.
We want to give people the choice of using a bank account, if they have one. The main business that the post office gets from us at the moment comprises two elements. One is the fact that we require anyone who is receiving jobseeker's payments to collect their money in person at the post office. That is a major element of the business of the post office and accounts for over 20 million transactions. The second element relates to people who do not have a bank account and who opt to use their local post office, and long may they continue to do so.
I have asked to have the form reassessed with a view to making the language more neutral. That is under way at the moment. I believe people should have an option in respect of what is best for their circumstances.
It is not an option if the Department recommends a particular choice, which is what is stated in the document.
Please, Deputy. We have to move onto the next question now.
As I have said, I have asked for the forms to be reassessed. These forms are reviewed, designed and updated all the time, and I have asked for that to be done.
There is a wider point. We should move to a standard bank account for people who currently do not have a bank account. There are so many transactions nowadays in society - not necessarily to do with social welfare, it applies in other areas as well - that the availability of a standard bank account from a local post office would be a great boon to the post office and a great boon to doing business in rural and urban areas where there are post offices.
