Beginning May 1, 2011, anyone newly applying for Social Security, Veterans Affairs or other federal benefits will need to choose an electronic payment method , and those currently receiving their federal benefits by paper check must switch to direct deposit by March 1, 2013.
Treasurer of the United States Rosie Rios highlighted the savings to taxpayers by ceremonially writing a check to American taxpayers in the amount of $1 billion – the move is expected to save taxpayers $1 billion over the next decade. “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, according to a press release. In fact, 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.
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 http://www.GoDirect.org, or 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.
Anyone already receiving federal benefit payments electronically will continue to receive their money as usual on their payment day. No action is required.