Q&A for May Day bank holiday pay mess
Published 03/05/2014 | 02:30
Q: Why does a May Day bank holiday in France mean I did not get my state pension paid into my bank account in Naas?
A: You are just one of thousands of people who were left without wages and pensions after the May Day holiday on the Continent shut down interbank transactions in this country.
It's because Ireland has put in place the Sepa system. This is the EU-wide Single Euro Payments Area initiative. It aims to have similar systems in place for making payments out of banks across Europe. The downside is that no payments can be paid in Ireland if there is a bank holiday on the Continent on a normal business day in Ireland. May Day is a bank holiday in all but four EU countries (the Netherlands, Britain, Denmark and Ireland).
So expect this to happen again on May Day next year.
Q: Surely most payments are made electronically and computers don't stop for bank holidays?
A: The May 1 bank holiday meant that the ECB and and European Clearing House were closed down.
According to Mick O'Neill, the Sepa Ireland programme at the Irish Payments Services Organisation, it is not the computers' fault, it is the inability to settle the transactions. "For example, if a bank is due to receive credits to the value of €10m it needs to be sure that they have received that value from other banks before it credits individual accounts." That settlement process could not take place, hence the delays.
Q: Ah, but did bankers, employers and those people in the Department of Social Protection not see this coming?
A: The Irish Payments Services Organisation says it took out adverts in newspapers and told all the banks to put notices on their website to inform people of the payments shutdown.
It insisted it told major employers such as the Department of Education, which pays teachers, and the HSE, which pays nurses and other medical staff, about the payment freeze in the run-up to May Day.
IPSO said it warned the Department of Social Protection in advance that it may need to pay pensions, dole payments and other benefits, earlier than usual to avoid getting caught up in the mess.
But the Department of Social Protection admitted that thousands of people did not get their payments into their accounts.
Problems with individual banks also delayed some wage payments that were supposed to be processed earlier this week to allow for the one-day shutdown.