Effective this month, the U.S. Department of the Treasury will stop mailing paper checks to anyone receiving Social Security, Veterans Affairs or other federal benefits, according to Allsup.
The move, which is part of the Treasury Department’s initiative to phase out paper checks, affects not only seniors and veterans, but also those receiving Social Security disability benefits.
“Individuals still receiving federal benefits by check are required by law to switch to the electronic payment option of their choice—direct deposit into a traditional bank or credit union account or deposit onto a payment card, such as a debit card,” said Tricia Blazier, personal financial planning manager at Allsup.
The Treasury Department estimated electronic benefits payments would save the federal government $1 billion in 10 years. Most federal beneficiaries already receive funds electronically.
As of January, about 94 percent were using direct deposit or a debit card, but about 4.2 million paper checks nationwide were issued in January 2013.
While March 1 was the deadline, the checks won't end automatically; but many seniors should expect to receive letters encouraging them to sign up for electronic payments.
And if you were born on or before May 1, 1921, you can still receive that paper Social Security check if you want, according to U.S. Treasury officials.
Individuals can change their benefits payment method in a couple of ways, including:
- Contact their bank, credit union or savings and loan association to shift to electronic payment.
- Contact the Treasury Department’s Electronic Payment Solution Center at 800-333-1795.
- Contact the Social Security Administration if they are receiving benefits and have an existing bank account, at 800-772-1213, or TTY 800- 325-0778.
Those who receive benefits by check and don’t do anything to switch to a personal account will automatically begin receiving benefits through the Direct Express® debit card, offered by the Treasury Department.
Representative payees, or individuals who receive a check on behalf of someone else, also must comply with the switch to electronic payment.
Find more details at http://www.GoDirect.org.