Are you still receiving your Social Security or other federal benefits check by mail? If so, you are part of the some five million Social Security, Railroad or Federal retirement or Veterans benefit recipients the Treasury Department says still have not converted to electronic processing, either by direct deposit or special debit card. On March 1, 2013, the Treasury is going paperless for Social Security and other Federal benefit payments.
Why the change? One of the reasons that has been given is that it is more secure and safer for you. There would be no worry that your paper check could be stolen out of your mailbox or lost. Like many other government programs, there is another reason, follow the money.
The Treasury Department calculates that it costs about one dollar to process your paper Federal benefits check, but only about 10¢ to process your payment electronically. There were nearly 11 million paper checks being issued monthly when the change was announced two years ago. It is estimated that the going paperless will save the government $1 billion over the next ten years.
You should have been notified nearly a year ago that you had until March 1, 2013 to make the change. And if you did not make the change by March 1, the Treasury Department said it was going to make the change for you, by issuing the special debit card.
However, with only about a month to go, there are still nearly half the people receiving paper checks. Think of the logistical nightmare it would be with the Treasury Department trying to convert five million Social Security and other Federal benefit accounts to the special debit card all at once. The Treasury Department is backing off a bit.
Walt Henderson, Director of the Electronic Funds Transfer Strategy Division for the Treasury Department, said if you are receiving paper checks and don’t make a switch by March 1, you will not be automatically switched to the special debit card. He said that you could receive letters offering assistance in changing to direct deposit or the debit card.
He said, “We will not interrupt payments if a person does not comply, nor will we switch a payment method automatically.”
And there are some exceptions to allow you to still receive a paper check by requesting a waiver from the electronic payment requirement. You may be able to continue to receive paper checks if you live in a remote area without sufficient banking infrastructure or if electronic payments would impose a hardship upon you due to a mental impairment. If you were born on or before May 1, 1921, you can still receive that paper check if you want it. You can request a waiver application by calling 800-333-1795.
If you are retiring or applying for Social Security or other Federal benefits now, you do not have a choice between electronic payments or paper checks. You only can receive benefits electronically. No paper checks will be available.
If you are currently receive federal benefits by paper check and have a bank or credit union account, you should sign up for direct deposit online at www.godirect.org, by calling the U.S. Treasury Electronic Payment Solution Center at 800-333-1795, or by visiting your local bank/credit union branch or federal benefit agency office. Because of the sheer volume of conversions yet to be made, the Treasury Department is encouraging you to make the switch online or use of the toll-free number.
If you prefer a prepaid debit card, you can sign up for the special debit card by calling the U.S. Treasury Electronic Payment Solution Center at 800-333-1795 or contacting your local federal benefit agency office. You do not need a bank account to sign up for the card.
You will need to gather up some information before making the switch to electronic payments. This information includes your Social Security number or claim number, your 12 digit Federal benefit check number and the amount of your most recent check.
When choosing direct deposit, you will also need your bank or credit union account number, the type of account (checking or savings) and the bank or credit union’s routing transit number, which is usually printed on your checks next to your account number on your checks.
If you were born after May 1, 1921, switching to electronic payments is not optional, it is the law. You still have about a month to make the change. And according to the Treasury Department, it is “fast and easy”
By: Matthew M. Wallace, CPA JD
Published edited January 27, 2013 in The Times Herald newspaper, Port Huron, Michigan as: Government getting rid of benefit checks