Thomas Pringle (Donegal South West, Independent)
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59. To ask the Minister for Social Protection her role in supporting the provision of the standard bank account through An Post for delivering social welfare payments through the post office network; and if she will make a statement on the matter. [33202/13]

Joan Burton (Dublin West, Labour)
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I am pleased to advise the Deputy that An Post recently became the preferred bidder for the delivery of over-the-counter cash services to Department of Social Protection customers subject to contract agreement.

Last year some 43.7 million payments, or 50% of all payments made by my Department, were issued in cash through An Post's network of 1,152 post offices nationwide. I am very anxious to highlight the significance of the expenditure in local economies, in every town, city and village. Although negotiations remain to be concluded, An Post's selection as preferred bidder for the new contract will continue to contribute to the vibrancy of both the rural and urban economies. However, at this juncture, An Post does not provide a standard bank account. The Department of Social Protection is a key player in the payment services sector, with over 87 million payments issued to customers in 2012. It envisages an environment in which social welfare payments delivered to customers will ultimately provide an electronic option for everyone. This goal is in line with wider Government policies.

It is noted in the strategy for financial inclusion report that the post office network has the potential to play a key role in the delivery of standard bank accounts. As the roll-out of the standard bank account is being driven by the Department of Finance, it will be a matter for that Department and my colleague, the Minister for Finance, Deputy Michael Noonan, to work with all potential providers, including An Post, in the coming months to optimise the nationwide availability of the standard bank account.

Additional information not given on the floor of the House

Supporting achievement of financial inclusion for customers is of fundamental importance to the Department. In this respect, it is working with the financial inclusion working group established by the Department of Finance to support access to the new standard bank account. The Department's payment strategy is contingent on the roll-out of the standard bank account. The combination of the national payments plan, the standard bank account and the Department's payment strategy can, as three interdependent initiatives, realise tangible benefits in delivering a more efficient payments landscape and grow opportunities and benefits for consumers and business alike in the medium term. My Department will continue to work with the Department of Finance and the financial inclusion working group to progress the roll-out of the standard bank account.

Thomas Pringle (Donegal South West, Independent)
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The point of my question is that 17% of people in the country do not have access to a bank account. Most of them are probably social welfare recipients who are the customers of the Minister's Department. While recognising the role of An Post in facilitating payments and its success in becoming the preferred bidder, I also know that the Department's preference is to move to electronic payments, with the aim of having only 3% payments made in cash by 2017. This will have very serious implications for the recipients of social welfare payments and also for An Post and the viability of its network. The basic payment account is very important for the recipients of social welfare payments who could continue to access their payments through the use of this account at the post office. The Department should have a role in the roll-out of the basic payment account to ensure post offices can provide that service for the Department's clients and that the system works. I ask the Minister to ensure the Department of Finance will make this happen.

Joan Burton (Dublin West, Labour)
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The post office network has a very important role in the economic and social infrastructure of small towns and villages. However, An Post does not have the standard bank account facility which, perhaps, should have been developed a long time ago. It now has the opportunity to possibly work in conjunction with whoever might be its preferred partners.

I draw to the attention of the Deputy another element of An Post which is important to me. My Department asks all new jobseekers to collect their payments in person. This is of very significant assistance in deterring fraud. People have to show up and cannot have someone else collect payments for them. An Post potentially has an important role. For example, the postmaster or postmistress knows everyone in the local area. This knowledge provides a front-line of defence against fraud. This is a service which all providers cannot offer. The electronic fund transfers are significantly cheaper. I recently visited Milltown Malbay where I spoke to a number of postmasters and postmistresses. They told me that on Thursdays and Fridays, particularly in the winter months, there was very little activity, except for people coming to collect retirement pensions, for example, who then bought their groceries in the shops.

Thomas Pringle (Donegal South West, Independent)
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The Minister has outlined one of the reasons the post office network is so important. It is important from a social protection perspective to provide the basic payment account through the post office network. The recent pilot study carried out by the Department of Finance produced very disappointing results because An Post was not actually included in the pilot programme. There is great distrust of the banks. This has been very well rehearsed in the House and we know the reason. An Post would allow those with no bank accounts but who are clients of the Department of Social Protection to receive electronic payments. This would reduce the costs of the Department and retain an element of security in terms of identifying fraud.

Joan Burton (Dublin West, Labour)
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By and large, those who do not have bank accounts tend to be those who are less well off or perhaps older people. Perhaps they include people who, wisely, learned not to trust banks too much. It is partly a cultural phenomenon.

In Africa, for instance, almost all banking is done by telephone. There has been an enormous change in how banking is carried out nowadays. If the basic bank account, as committed to by the Minister for Finance, is developed in conjunction with a countrywide operator such as An Post, the system will reach into every parish in the country. It affords an opportunity to be a social and economic vehicle in the way we just described. I hope the Minister for Finance takes this into account in the context of the deliberations of his Department. I do make my views known.