Brendan Griffin (Kerry South, Fine Gael)
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563. To ask the Minister for Social Protection the measures she is taking to support the use of post offices in connection with social protection payments; her future plans in this area; and if she will make a statement on the matter. [14081/14]

Joan Burton (Dublin West, Labour)
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I was very pleased to sign a multi-year contract with An Post for the delivery of over the counter cash services to welfare clients in December last year following an EU-wide procurement competition. This contract, which is very substantial in terms of its reach, value and impact, enables the disbursement of cash payments to some nine hundred thousand (900,000) clients currently. These services are provided through a network of over 1,300 post offices and agencies around the country.

Last year approximately €9.5 billion was paid in cash to our clients at post offices. This accounted for 43.7 million transactions and cost the Department just under €75 million (including internal processing costs). By comparison, some 37 million payments were issued directly into accounts in financial institutions by electronic funds transfer (EFT) and cost the Department under €9 million. In short, cash payments are an inherently more expensive means of paying clients. The differential reflects to a large part the additional costs incurred in securely packing, processing, transporting, delivering and issuing cash to clients. The Department must address such a significant variation in costs in the interests of the economy, taxpayers and welfare clients.

Mindful of the scope, scale and impact of these payments, the Department undertook a root and branch examination of its payment processes, methods and approaches. This resulted in the preparation of a Payment Strategy which was approved by the Government last year. The Strategy has the goal of reducing significantly the level at which welfare payments are made in cash and thereby minimising the associated expensive fees. This is in keeping with wider Government policies and changes in consumer preferences. It is based on the objective of better public services and more effective e-payments as set out in the Public Service Reform Plan and the eGovernment Strategy 2012-2015. It is also aligned to the objectives of the National Payments Plan, which highlighted that the move to electronic payments is critical to reducing the very high levels of cash usage in the Irish economy with its consequential impacts on costs and competitiveness. The Strategy aims to remove the limits that cash payments impose on clients in terms of making onward financial transactions and availing of cheaper prices online.

We are all aware of the clear trend towards electronic payments which are being adopted by consumers generally as a matter of choice. These behavioural choices are very apparent among the Department’s clients also. Two out of every three clients who claimed a contributory state pension last year chose to have it paid into an account. Four out of every five new child benefit clients chose to be paid electronically into an account. The Department is willing to accommodate its clients in exercising the choice of electronic payments where this is possible in the interests of economy, efficiency and national competitiveness.