A new report has found that if An Post loses the Government social welfare contract, up to 557 post offices around the country could close down.
The report was commissioned by the Irish Postmasters’ Union from Grant Thornton.
It found that 557 post offices - 48% of the network - would close by 2017. There are currently 1,150 post offices at present.
Both urban and rural communities would be hit by the closures that would follow the loss of the social welfare contract, the report added.
The two-year social welfare contract is currently held by An Post with possible extensions for up to four additional years. The new two year deal was agreed in December.
But the Government is committed to moving to electronic payments as part of its eCommerce strategy and this is causing serious concern to the 1,100 postmasters around the country.
Grant Thornton said that additional Government business is necessary to help sustain the network. They found that if motor tax renewals were available in post offices it would save the exchequer €60.6m over a five year period.
However, they concluded that the additional business alone would not compensate for the loss of the welfare payments business.