If you get Social Security or other federal benefits by paper check, prepare to say goodbye to the paper.
Federal benefit recipients have until March 1 to open a direct deposit bank account or get a prepaid debit card as the Treasury Department continues to phase out paper checks.
Since May 1, 2011, all new applicants for federal benefits have had to pick an electronic delivery method. Now remaining recipients have a choice of using direct deposit or a prepaid debit card, such as the government’s Direct Express card.
The government’s aim is to save money and to make the receipt of benefits safer.
“Choosing direct deposit or the Direct Express card makes it easier, safer and more convenient for beneficiaries to receive their payments,” said David Lebryk, commissioner of the Treasury’s Financial Management Service. “Switching to an electronic payment is not optional. It’s the law.”
There are no signup fees or monthly fees to receive benefits electronically.
While the Treasury expects most people to meet the March deadline, “there will be extenuating circumstances, people with unique situations, so we’ll wait until after March 1 and see what we’re left with and we’ll start reaching out to people direct through the mail,” said Walt Henderson, director of the Treasury’s EFT Strategy Division.
You needn’t worry about losing your benefits if you don’t meet the deadline. “These are benefit payments,” Henderson said. “Oftentimes they are the primary source of income, so we’re not going to disrupt that payment.” However, you’ll be prodded by the Treasury to eventually switch over to electronic payment.
If you’re 90 or older, you’re exempt from the requirement.
Others who don’t want to switch can apply for a waiver, but the Treasury will grant exceptions only in rare circumstances.
For instance, you must be living in a remote area that makes it difficult to receive electronic payments.
Or you must be someone “for whom electronic payments would impose a hardship due to a mental impairment.”
“Sometimes the electronic payment’s the better choice vs. delivering a check to a remote area,” Henderson said. “The person who perhaps is having trouble managing their finances should perhaps have a caregiver involved.”
To get the word out, the Treasury has launched the Go Direct public education campaign and is working with more than 1,800 partner organizations nationally.
“Some seniors really like to see the comfort of that check,” said Suzanne Cobb, director of the Guardianship and Money Management program at the Senior Source in Dallas. “Some seniors don’t even have a bank account. They deal strictly with cash, so we try to counsel with them.”
Of course, many seniors already have direct deposit.
“The challenge here is to reach the ones who aren’t getting direct deposit,” Cobb said. “It’s our older people who have a distrust of banks because of the Depression.”
How to sign up
For more info, call the Go Direct program toll-free at 800-333-1795 or visit www.Go Direct.org.