John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Question 535: To ask the Minister for Defence the reason army personnel have been instructed to open bank accounts rather than use their existing credit union accounts for the purpose of being paid their subsistence allowance in view of the fact that their pay cheques are already being paid to their credit union accounts; if he will ensure that the option is given to those concerned as to the financial institution they wish to use; if the technology used by his Department is as flexible as the commercial sector; if it will allow individual arrangements to be put in place; if he will arrange, if necessary, for the cheques to be delivered to the barracks for the persons concerned; and if he will make a statement on the matter. [18484/06]

Willie O'Dea (Limerick East, Fianna Fail)
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In July 2004, my Department, in pursuance of Government policy in relation to increasing the use of electronic payments by the Public Sector, made a policy decision to pay all travel and subsistence payments by electronic means only. Accordingly, following consultation with all interested parties, including the military representative associations, the issuing of payable orders for such expenses ceased in November 2004. The exclusive use of the Electronic Fund Transfer system (EFTS) for travel and subsistence payments ensures that payment is received promptly and securely by individuals. In addition, individuals have access to payments when absent on annual leave, sick leave, or away from their workplace. Payments may be made by electronic means to accounts held in banks and building societies and all employees were informed accordingly in 2004. The feedback from the vast majority of claimants has been very positive and some 50,000 travel and subsistence payments now issue electronically each year. As things stand, my Department cannot extend the electronic payment facility to credit union accounts, as no credit union is a participant in the Irish electronic payments clearing system operated under the umbrella of the Irish Payments Services Organisation (IPSO). Consequently, it is not possible to make payments direct to an individual's credit union account. My Department will of course review its position should the situation change.

Pay is issued by electronic means by my Department to a number of credit unions in the case of a relatively small number of military personnel through the use of the credit union's own current account held in a financial institution. The credit unions then forward monies to each member's credit union account on foot of a payroll listing faxed to them every week by my Department's Finance Branch. My Department has facilitated this arrangement over a long time as it involves the pay of the individual's concerned. It is not proposed, however, to extend such a facility to travel and subsistence payments, given the additional workload involved and Government policy in the area of electronic payments.

I consider that the current policy in relation to the payment of travel and subsistence expenses represents the best use of existing technology and scarce resources and I have no reason to believe that my Department's processing systems are not as flexible as those in use in the commercial sector.