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.
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U.S.
Treasurer Rosie Rios holds $1 billion check as symbol of savings
from going to electronic pay methods |
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.
For more information, visit
http://www.GoDirect.org.
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Over 18% of
Personal Income from Fed - Aging Population
Here's an indication of
how widespread the support for federal spending is, especially for the
sort that winds up providing income support or health-care for
Americans.
USA Today reports that 18.3 percent of the nation's total 2010
personal income was from the federal government in the form of Social
Security, Medicare or other social safety net programs. For years until
2000, the story says, the percentage bumped along at about 12.5 percent.
Partly due to job
losses caused by the Great Recession, wages made up the lowest share of
income since the government started keeping records in 1929, according
to USA Today.
The aging of the U.S. population was among several factors
driving up the percentage of Americans who depend completely or in part
on federal help.
NPR
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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.
