Pensioners pay price for Government’s banking move

Department says it is in talks with Danske Bank about the charges

 

It may not have been on the agenda when the Government chose Danske Bank to conduct its banking services back in 2018, but given that more than two million people are in recipient of some form of a welfare payment, banking charges should have been a key concern.

The contract was previously held by Bank of Ireland, but was won by the Danish bank when the Government held a competitive tendering process for its banking services for the first time. Danske Bank had been a key presence in the Irish banking market, having acquired National Irish Bank in 2005, but pulled out in 2013 after racking up significantly bad loan losses. However, it has retained its corporate and institutional banking operation in Ireland.

At the time of the announcement, a spokesperson for the Department of Public Expenditure and Reform said the “only change will be the service provider”, while then minister of state Patrick O’Donovan said the appointment of Danske Bank, with the support of An Post, would be “the most advantageous arrangement on behalf of the Irish people”.

Some three years on however, thousands of pensioners living in North America with an entitlement to an Irish-funded pension, are finding that the move has been anything but “advantageous”.

Indeed while the former operator, Bank of Ireland, was able to make the weekly payments to those living abroad via direct deposit, its replacement has opted for pricey international wire transfers. On an annual basis, the fees associated with such transfers may make sense; but charging more than €10 for weekly payments, which are at most worth €248 and in many cases worth far less, seems less than economical.

The Government’s appointment of Danske Bank has already raised some eyebrows, given that the bank is caught up in a major money laundering scandal involving €200 billion in suspicious transactions that flowed through its Estonian unit between 2007 and 2016.

Now, having pensioners pay such hefty banking charges – when it was apparently possible to transact the payments without such fees before– raises another question mark.

The Department of Social Protection said it is talking to Danske Bank about the situation. Let’s hope for those hit with the charges that a solution can be found.