HALF the country's post offices will close with the loss of around 2,000 jobs if the network loses its key business of delivering cash payment services to social welfare customers, a key report warns.
The analysis, to be published next week, shows that if all the social welfare business transfers to the banks, then 567 post offices will be forced to close.
If 75pc of the business is lost, 440 offices will close, according to the report by consultants Grant Thornton.
The report was commissioned by the Postmasters' Union, which represents postmasters in over 1,100 post offices throughout the country.
Brian McGann, general secretary of the Postmasters' Union, acknowledged that a contract had recently been signed between An Post and Social Protection to deliver €9bn of cash social welfare payments for another two years with an option to extend that by a further four years.
But Mr McGann warned that at the same time, Social Protection was bypassing the post offices, by driving more and more social welfare recipients over to electronic payments through the banking system.
Social welfare payments are the mainstay of the post office network and the union estimates that it is worth €18,000 per year to the postmaster or 35pc of their gross income.
He said that there were more than 1,100 postmasters employed by An Post as agents to run the post offices, and a further 3,000 were employed as assistants.
"Rural and urban communities will suffer if the post office network disappears," said Mr McGann.
He called on the Government to follow up on its previous commitment to maintain the post office network and come up with a plan to secure its long-term viability.
The union will shortly launch a campaign to highlight the threat to the network by the Government hiving off its business to banks, supermarkets and other private companies. He is also concerned at a deal between An Post and supermarket chain Tesco to provide An Post services in store.
Mr McGann said he was "baffled" as to why post offices failed to secure the contract to handle the new driving licence applications, particularly as it already successfully handled passport applications.
There were only 34 centres around the country where applications for driving licences could be made, as opposed to the 1,100 post offices, he said.
This forced people to drive long distances to get their licences renewed while 98pc of the population were within 20km of a post office, he said.