Since the Deputy last raised this matter in June, my Department has introduced further payment system changes to cater for some Canadian pensioners whose payments were being processed by more than one correspondent bank in Canada.
As previously stated, EFT payments to markets outside of Ireland where the sending bank is not a member of the domestic clearing system, such as the US or Canada, are processed as international cross border payments, also known as international wire transfers. Processing such payments as international wire transfers ensures that the sending bank complies with its national and international Anti Money Laundering (AML) and Counter Terrorist Financing (CTF) obligations.
In order to effect these international wire transfers in markets such as the US and Canada, the services of a correspondent bank - effectively an intermediary bank - are necessary where the sending bank is not a member of the local bank clearing system. This is the industry standard approach.
Correspondent banks will deduct charges from the payment amount to compensate for the cost of processing the payment and discharging their AML and CTF obligations.
Further process changes were implemented by my Department to ensure that all Irish Social Welfare payments to Canadian residents are now only handled by a single correspondent bank, thus limiting their potential exposure to foreign bank fees. Issues arising from clearing payments through the Canadian banking system are unique.
There has been no requirement to make additional payment process changes for other countries since June.
The Department continues to advise customers to seek improved fee arrangements from their own bank or with another financial institution and continues to provide the most up to date information it has on bank fees for pensioners living in Canada.
Many bank customers in both Canada and the United States can avail of reduced bank fees on pension payments, depending on the financial institution that they bank with and the type of account they hold. The Department of Social Protection is aware of a number of pensioners in both the United States and Canada who do not incur any bank charges due to the arrangements they have made with their own financial institutions.
Ultimately, my Department has no control over the fees charged by foreign banks on their own customers.
