Post offices to get €12k a year under Government rescue package
Post offices could be paid up to €12,000 a year in public service obligation payments. File picture: Denis Minihane
A plan worth tens of millions of euros to save rural post offices from closure will come to Cabinet on Tuesday.
It could see post offices receive €12,000 a year each as a public service obligation (PSO) payment.
Hildegarde Naughton, the junior minister who has responsibility for postal policy, will bring forward proposals aimed at safeguarding the future of rural post offices.
There are around 900 post offices across the State, some 875 of which are independently operated by postmasters.
Ms Naughton has previously said that rural post offices should not be allowed to close.
If agreed, the package will be the first time Government has intervened with a direct financial support scheme for post offices.
The package is expected to operate for a number of years and cost tens of millions of euros.
The Government support comes after an €8.5m support package, which is being fully funded by An Post, was agreed upon last July to run until the end of this year.
The Irish Postmasters’ Union (IPU) has warned of “unrestrained” post office closures if the Government does not act quickly to provide financial support or an “annual retainer”.
The IPU has pointed to a Grant Thornton report that outlined that €17m a year is needed to safeguard post offices.
Government sources have said the yearly figure in the plan is “not far off” that amount when total costs are factored in.
The postmasters are independent enterprises contracted by An Post to run post offices across Ireland and, as such, are not State employees nor are they employees of An Post.
As contractors, they are paid for the transactions in post offices but transformation fees expired at the end of June 2021, leaving postmasters warning of a “cliff edge” in services.
It is hoped that Ms Naughton’s proposal will avoid a raft of closures and bring certainty to the sector in the medium term.
The IPU has said that commitments made in a 2018 national plan for the post office network — to provide services within 3km in urban areas and 15km in rural areas — as well as plans to support Bank of Ireland branch services, could only be delivered with Government support.
The issue was raised in the Dáil last week when Tánaiste Leo Varadkar said that the scheme would not be a lifeline for every post office in rural Ireland.
“It does not mean that every post office will remain open,” he said.
“It means that, where there is somebody willing to be the postmaster and to keep the post office open, it will be a viable commercial option for them to do so.”
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