Dara Murphy (Cork North Central, Fine Gael)
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167. To ask the Minister for Social Protection her plans to remove the cash-post office payment option with regard to the State pension; and if she will make a statement on the matter. [51518/13]

Joan Burton (Dublin West, Labour)
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The Government has approved a Payments Strategy for this Department which has the aim of modernising its payment processes and approaches over the coming years. It includes the objective of progressively migrating the bulk of the Department’s customers to electronic methods of payment, subject to satisfactory arrangements for all of the Department’s business and anti-fraud requirements. This is a key element of the Government’s wider National Payments Plan which is aimed at reducing costs and improving the competitiveness of the Irish economy. The estimated net cost to the Department of issuing a payment in cash is six and a half times more than paying to an account in a financial institution. Clearly, with some 87 million payments per annum being issued by the Department – 50% of which are in cash – every effort should be made to drive efficiencies where they are available within our payments processes. The Payment Strategy will be published in the near future.

The progressive migration of customers to electronic payments will include those in receipt of state pension. It is anticipated that the majority of welfare payments will eventually be made by EFT into accounts in financial institutions, but it is also expected there will be a sizeable minority that may not be able or wish to use such financial institutions or whom the Department may wish to manage otherwise as part of its control and anti-fraud measures. Accordingly, the Strategy sets out how an alternative electronic solution will be procured to accommodate such people.

The trend towards electronic payments is appreciable. Last year those customers claiming state pension for the first time chose EFT as their preferred payment method by a ratio of two to one despite the cash option being available. Approximately half of the current customers have already opted to be paid by electronic payment directly into an account in a financial institution. It appears from research undertaken for the Department that there is some scope for more pensioners to be paid by electronic payments. In a survey of welfare customers, while 62% of the pensioners interviewed were being paid in cash, 81% of those customers have and use bank accounts, 69% have a credit union account and 40% have a savings account.

The first phase of implementation of the Payment Strategy has commenced with a new contract being put in place with An Post to maintain existing over the counter cash services. This will ensure that customers, including those in receipt of state pension, can continue to receive their payments in cash at local post offices for the foreseeable future.

Moving to electronic payments will require a significant effort to assist and support suitable customers over the coming years. The Department will work energetically to help customers and their representatives in the transition period. The Deputy can, however, be assured that customers will not be refused a payment simply because they cannot receive it electronically.