Seniors' Alerts
Treasury Retiring Paper Check for Social Security, Other Benefits; Saves $1 Billion
Seniors, others currently receiving federal benefits by paper check must switch to direct deposit by March 1, 2013.
April 27, 2011 – Starting on May 1, the U.S. Treasury will switch to an electronic payment method for Baby Boomers and others signing on for Social Security, veterans’ affairs payments or other benefits. Senior citizens and others currently receiving their federal benefits by paper check must switch to direct deposit by March 1, 2013. The move is projected to save taxpayers $1 billion over ten years.
Treasurer of the United States Rosie Rios yesterday highlighted the savings to taxpayers by ceremonially writing a check to American taxpayers in the amount of $1 billion.
· “More than 18 million baby boomers are expected to reach retirement age during the next five years, with 10,000 people a day becoming eligible for Social Security benefits,” said Treasurer Rios.
· “It costs 92 cents more to issue a payment by paper check than by direct deposit. We are retiring the Social Security paper check option in favor of electronic payments because it is the right thing to do for benefit recipients and American taxpayers alike.”
The Treasury Department published a final rule in December 2010, to gradually eliminate paper checks for federal benefit payments. In addition to the taxpayer savings, electronic payments are safer and more convenient than paper checks. Last year alone, more than 540,000 Social Security and Supplemental Security Income (SSI) paper checks were reported lost or stolen and had to be replaced.
People newly applying for federal benefits on or after May 1, 2011, must choose an electronic payment option at the time they sign up for their benefits.
Direct deposit option
If they wish to direct their money into a bank or credit union account, they will want to have the following information on hand at the time they apply for their benefits:
· Financial institution’s routing transit number (often found on a personal check)
· Account type – checking or saving
· Account number (often found on a personal check)
Prepaid debit card option
People who prefer receiving their payments on a prepaid debit card or who do not have an account at a financial institution can receive a Direct Express Debit MasterCard card.
Historic move away from checks
On January 31, 1940, Ida Mae Fuller received the first monthly Social Security benefit check and, to date, about 165 million people have received Social Security benefits.
The movement toward electronic payments has been steadily increasing. According to the 2010 Federal Reserve Payments Study, electronic payments now make up over three-quarters of all noncash payments nationwide.
There were 5.7 billion fewer checks written in 2009 than in 2006, a decline of 6.1 percent per year – while electronic payments grew 9.3 percent during that same period. Among federal benefit recipients, approximately eight in 10 receive their Social Security or other federal benefit payment electronically.
Go Direct public education campaign
The Treasury Department’s Go Direct® public education campaign provides information to Americans about the change to how federal benefit payments are being delivered and makes it easy for current check recipients to switch online at www.GoDirect.org or by calling a toll-free helpline.
Making the switch from paper checks
Current check recipients must switch to electronic payments before March 1, 2013. Switching from checks to direct deposit is fast, easy and free at http://www.GoDirect.org, by calling the U.S. Treasury Electronic Payment Solution Center’s toll-free helpline at 1-800-333-1795, or by speaking with a bank or credit union representative.
If you do not choose an electronic payment option by March 1, 2013, or at the time you apply for federal benefits, you will receive your payments via the Direct Express® card so you will not experience any interruption in payment.
Anyone already receiving federal benefit payments electronically will continue to receive their money as usual on their payment day. No action is required.
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