Department faces 'incompetence' criticism over payments blunder
Published 03/05/2014 | 02:30
The Department of Social Protection was accused of "breathtaking incompetence" after it emerged that thousands of pensioners and sick people were hit with delays to their payments.
They were caught up in banking chaos which began with a May Day holiday on the continent which shut down interbank transactions in this country, and continued into yesterday.
Officials from the Department of Social Protection admitted that there were huge delays paying State pensions, illness benefits, jobseekers payments, and widow's pensions.
The chaos also left many workers without pay for close to two days, despite banks taking mortgage and other payments.
It left thousands of people overdrawn, and prompted fears of penalty fees and charges being imposed by banks.
This was despite the fact that the Irish Payments Services Organisation, the representative body for the payments industry, insisted it warned the department that banking transactions were due to be frozen across Europe on May Day.
The mess meant some people had to wait until the close of business yesterday before they had funds, leaving them facing into the bank holiday weekend scrambling to buy groceries and other essentials.
Bank of Ireland took until late in the afternoon yesterday to get all its payments up to date. Because Ireland is now part of the Single European Payments Area (SEPA), there were no interbank transactions in most EU countries on May 1.
This meant banks here were unable to process wage payments or pay direct debits, leading to a multi-million euro build up of delayed payments.
Both the European Central Bank and the European Clearing House were closed, in what has been labelled a "SEPA holiday".
Chairman of the Consumers' Association Michael Kilcoyne hit out at the Department of Social Protection for its failure to anticipate the payments blunder.
Large numbers of other employers processed wage payments earlier than normal, to ensure people did not lose out, he said. Teachers and nurses did not lose out because the departments that process their payments made arrangements for early pay.
Mr Kilcoyne said: "This is an example of the breathtaking incompetence of the Department of Social Protection. They should have been aware of this. Too often the department treats its customers as second-class citizens. This is just not acceptable."
The Department of Social Protection appeared to blame the banks, when it insisted it was aware of the European bank holiday.
"The department made all the necessary arrangements for this in a bid to ensure customers were not inconvenienced in any way.
"Payments that were due to be paid on Thursday, May 1 by electronic funds transfer were brought forward by one day. They were issued by the department on Wednesday April 30 and the money was lodged in customers' accounts the same day."
One pensioner who contacted the Irish Independent explained that his AIB bank account was not credited with his pension payment before a direct debit was processed. This meant he was overdrawn.
"My account ended up in the red but the bank assured me that I will not be charged for this. I wait to see," he said.
Mick O'Neill of the Irish Payments Services Organisation insisted that all delayed payments were due to be updated by the close of business yesterday. Banks would be able to process any missed payments today, he added.
He said any customer bank accounts that ended up overdrawn due to the blunder would be corrected, and no one would end up having penalty fees and charges imposed.