While the nation and media have focused on fiscal cliffs and sequestration, a clock has been quietly running in the background – for three years. It may not be a cliff, but it may be a big hurdle for some retirees and veterans. In Kentucky, that’s some 892,000 beneficiaries.
On March 1, 2013, new electronic payment rules go into effect for most people who currently receive federal benefits via paper checks, Americans who receive Social Security, SSI and VA Compensation and Pension payments. The clock began ticking December 2010 when the U.S. Department of the Treasury announced that all federal benefit payments such as veterans and Social Security will be paid electronically by March 1st.
The good news: according to the Treasury Department, individuals who do not switch from paper checks to electronic payment by the March 1st deadline will continue to receive paper checks. And these same individuals will receive “gentle reminders” in the form of more mail from the U.S. government, but their paper Social Security checks will continue to be delivered.
What consumers need to know:
• Payments will be accessible through direct deposit into your bank account or through a Direct Express prepaid debit card from the U.S. Department of the Treasury.
• The Treasury Department is recommending the Direct Express® Debit MasterCard® card. It’s a prepaid debit card option for federal benefit recipients. Cardholders can make purchases, pay bills and get cash back. No bank account or credit check is required to enroll and there are no sign-up fees or monthly account fees.
• To sign up for direct deposit, go to www.GoDirect.org or call 1-800-333-1795.
If you’re ready to get your federal benefit payments paid by direct deposit to your checking or savings account, you’ll need:
- Social Security number or claim number
- 12-digit federal benefit check number
- Amount of most recent federal benefit check
- Financial institution’s routing transit number*
- Account number and type – checking or savings
• To view FAQ and additional resources, visit Social Security Direct Deposit.
Why the switch from paper to electronic direct deposit? Billions of reasons: Save Money. The U.S. Treasury Department’s estimates it will save $130 million annually or 1 billion over the next ten years by phasing out paper checks. The Treasury is doing its part for efficiency, while reducing financial fraud and abuse including identity theft.
For more about Social Security’s switch to paperless benefits and debit cards, listen to or read the NPR segment:NPR – Treasury Says It’s Time to Go Electronic
There are some hardship exemptions: persons born prior to May 1, 1921, or those who apply for and receive a waiver based on mental impairment or remote geographic location. (Social Security recipients who applied for benefits after May 1, 2011, were already subject to these new rules.) The bottom-line: the change is here to stay.
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