Welfare chiefs will shut down Post Offices by pushing benefits recipients to use banks instead, postmasters have warned.
Staging a protest outside caretaker Social Protection Minister Joan Burton's office, the Irish Postmasters' Union (IPU) said her refusal to reverse the policy will sound the death knell for branches country-wide.
Ned O'Hara, IPU general secretary, said welfare payments make up to 30% of all Post Office business - or as much as half of its overall business when you include related transactions.
"Taking this work away from the network will close Post Offices all across the county," he said.
The IPU said the Department of Social Protection is issuing letters to casual and part-time workers who receive benefits, asking for their bank details for future payments.
There is no reference to the Post Office or that people could continue using the Post Office if they choose, the union said.
The postmasters claim welfare recipients are being led to believe they have no choice and are being forced to use banks, where they face charges to collect their payments.
Mr O'Hara said Ms Burton is refusing to withdraw the letters after both sides met this week.
"We can't understand why the minister is applying this policy when there is very strong public support for Post Offices," he added.
"The IPU collected half a million public signatures prior to election calling on the Government to support the network."
The Department of Social Protection confirmed it was offering recipients the choice of getting payments directly into a bank account, as part of a national plan to phase out cheques.
"In line with the National Payments Plan, the Department of Social Protection is seeking to reduce cheque usage in the economy," a spokeswoman said.
"Casual workers have to date been paid by cheque, which they can lodge direct to their accounts or negotiate at bank or Post Office counters.
"The majority of the department's customers who are paid by cheque choose to lodge them direct to their bank accounts.
"The department is now offering these customers the option of being paid direct to their bank accounts."
The spokeswoman said cheque payments are not issued through the Post Office "and as such do not reduce the number of existing cash payments made through post offices under the contract between the Department of Social Protection and An Post."
She added: "The option to move from cheque to direct payment to a bank account is entirely consistent with the National Payments Plan and is in line with payment methods that now prevail across the economy.
"To have weekly income (work plus welfare) payable in two different ways is a highly inconvenient and costly way of dealing with people in employment."