Claire Kerrane (Roscommon-Galway, Sinn Fein)
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423. To ask the Minister for Employment Affairs and Social Protection further to Parliamentary Question No. 1032 of 24 March 2021, the outcome of discussion with a bank (details supplied) regarding addressing bank charges experienced by pensioners living overseas; the action that will be taken to remove charges from pension payments and other social welfare payments which are affected by these charges; and if she will make a statement on the matter. [23197/21]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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In March 2021, the Department moved its foreign EFT payments to beneficiaries outside of the Single European Payments Area (SEPA) to Danske Bank. As a result of this change, US and Canadian banks levied cross border payment charges on their own customers' Irish pension payments.

Payments to markets outside Ireland where the sending bank is not a member of the domestic clearing system, such as the US or Canada, are processed as international cross border payments, also known as ‘international wire transfers’. Processing such payments as international wire transfers ensures that the sending bank complies with its national and international Anti Money Laundering (AML) and Counter Terrorist Financing (CTF) obligations. In order to effect these international wire transfers in markets such as the US and Canada, the services of correspondent banks are necessary, and their use is the industry standard approach.

Correspondent banks will deduct charges from the payment amount to compensate for the cost of processing the payment and discharging their AML and CTF obligations.

For payments to the United States of America, Danske Bank has negotiated a reduction in the wire transfer fee on Irish Social Welfare payments with its correspondent bank.

For Social Welfare payments to Canada, Danske Bank initially routed all the payments through its main correspondent bank in the country. While a correspondent bank can process payments to most Canadian banks, there are some financial institutions for which the assistance of another intermediary bank is required to complete the payment. In these instances, the payee may be charged wire transfer fees by each intermediary bank utilised.

Following advice from Danske Bank, the Department implemented a change in April to its file generation process. This system development is to reduce the likelihood of pension payments being routed through more than one Canadian intermediary bank. This change has been implemented in time for all May pension payments.

The Department has also amended its Social Welfare payment files to ensure that all pension payments to beneficiaries outside the SEPA zone are clearly marked as pension payments. This change was in place for all payments to North America in April. Many bank customers in both Canada and the United States can avail of reduced bank fees on pension payments, depending on the financial institution that they bank with, their fee plan and the type of account that they hold.

The Department of Social Protection continues to liaise with Danske Bank in relation to this matter.