Four hundred post offices could be put out of business if the Government moves social welfare payments to a purely electronic system, it has been warned.

Brian McGann, general secretary of the Irish Postmasters’ Union (IPU), claimed that forcing dole claimants to have money paid into accounts would decimate the traditional way of life.

Under a tender to be announced next month, the Government is to set out the need for a move to electronic payments and by-pass the post office network’s traditional over-the-counter transactions.

Mr McGann said many people were sceptical about banks after the financial collapse that crippled Ireland.

“We are not against using modern financial transaction methods — they are in use in Post Offices daily — but we believe in consumer choice. People should be free to choose the Post Office if they want to receive their payments there,” he said.

Stopping the over-the-counter payments could cost a postmaster 18,000 euro a year, 35 per cent of gross income.

The IPU said that more than half of postmasters earn less than €50,000 a year.

“Some 400 offices could close. This would be devastating, in social and economic terms for communities throughout the length and breadth of this country,” Mr McGann said.

"The post office retail network has delivered an excellent service to the Department of Social Protection and their clients for decades. In many cases in rural and working class urban areas, the post office is the only outlet in the area offering a range of financial services.

“Social welfare clients are very loyal to their local post office and use it for a range of financial services that supports their needs.”

PA