Topical Issue Debate on An Post & State Contracts

If post offices close in my constituency of Cork North-West, a majority of people will have no access to a financial institution in any town or village, with the possible exception of credit unions. Credit unions are being considered for rationalisation and are not open for normal hours of business in many places. The current proposals require a reduction in cash payments for social welfare benefits at post offices from the current level of 51% to 3% by 2017. This reduction in cash payments would directly result in the closure of 400 post offices.

People are sore with banks after what has happened in recent times. A new type of banking is being developed under which we must pay for each transaction. People who are in receipt of social welfare payments already have strained budgets. Many have gone through significant personal crises in recent years. Asking them to reduce their spending power in order to pay for every transaction is not something that I would support.

In many areas, the only available shop is attached to a post office. We know from a similar experience in the UK that most of these shops will close down. No cost-benefit analysis has been carried out to take into account the potential damage that could be caused by the Department’s actions socially, economically and to the overall community.

Security is also an issue. In recent times, there have been horrific crimes against older people and thugs have robbed them for small amounts of cash. In the new scenario, these same thugs will know that every pensioner will have a swipe card and a pin number, leaving them vulnerable to being forced to hand over their cards and details, guaranteeing a cash return for the robbers. Fraudulent payments could also be an issue. Making an automatic payment into a bank account with no necessity for someone to show up for payment is wide open to abuse. Unscrupulous people need not interrupt their days’ work to collect unemployment benefit fraudulently. Recipients of other payments can be living in another jurisdiction while continuing to draw their payments illegally without any fear of being detected.

During the banking crisis, the Department of Finance has benefited from significant levels of savings being deposited at post offices. If 400 post offices close, that money will gradually return to the banking system. The proposed changes may have short-term financial gains for the Department of Social Protection, but these will be more than offset by costs to other Departments, for example, the Departments of Justice and Equality, Finance and Transport, Tourism and Sport, as well as an unseen cost to the Department of Social Protection.

We must consider the potential for errors in electronic systems, such as that which occurred today. Electronic payments made to bank accounts have been delayed today due to a processing issue. Payments through post offices are a way of avoiding such a situation. This kind of delay can cause serious hardship for people who are living on the edge, where every cent counts. We all remember the impact of such a technological glitch when Ulster Bank had problems with its systems last year.