HUNDREDS of post offices will be financially safe for the next two years until the contract for issuing social welfare payments runs out in 2013.
The Department of Social Protection is reviewing the terms of its €54m annual contract with An Post and is understood to be considering making electronic payments directly to the bank accounts of welfare claimants.
Meanwhile, Irish Post Masters' Union (IPU) general secretary Brian McGann yesterday told delegates at the union's annual conference in Letterkenny, Co Donegal, that the network would be decimated if the contract was lost.
"We believe if we lost that contract, we could be looking at closure in the order of 500 or 600 post offices out of just under 1,100," he said.
Around 41 million social welfare payments are made every year through local post offices.
Mr McGann warned any decision to move way from the post office as the primary channel for social welfare payments would be "politically disastrous".
"Many social welfare recipients want to use their local post offices because it's friendly, convenient and accessible."
He added: "We see the people, meet the people and we know them because they are part of our community. This deters fraudsters who often rely on faceless, impersonal systems of payment to perpetrate their fraud."
A spokeswoman for the department pointed out that the contract with An Post runs until 2013. But a section in the briefing document for Social Protection Minister Joan Burton about the contract has been blacked out -- this is usually done to conceal sensitive information.
Outgoing IPU president Brian Cannon, whose rural post office in Lettermacaward, Co Donegal, has been in his family for 100 years, said more than 80pc of his business came from social welfare payments.
The post office network is larger than the combined branch network of AIB, BoI, NIB, Permanent TSB and Ulster Bank, the union pointed out.