(BPT) - Last year alone, more than 440,000 Social Security and Supplemental Security Income (SSI) checks were reported lost or stolen. Despite the risks, millions of senior citizens, people with disabilities and other federal benefit recipients still receive their payments by paper check.
Beneficiaries' increased exposure to financial crime is one reason why the U.S. Department of the Treasury is phasing out paper checks for federal benefits by March 1, 2013. The new rule requires that all federal beneficiaries choose an electronic payment option, either direct deposit or the Treasury-recommended Direct Express(R) Debit MasterCard(R) card.
'Criminals can steal checks out of mailboxes, leaving people who rely on that money for essentials, such as medicine, rent or groceries, in a difficult situation,' says David Lebryk, commissioner of the Treasury Department's Financial Management Service. 'Switching to an electronic payment method is one simple step people can take to protect themselves, and it must be done soon to comply with the new law."
The U.S. Department of the Treasury is urging paper check recipients to switch to an electronic payment method as soon as possible.
'Switching now, instead of waiting until the last minute, will help ensure a smooth transition to electronic payments,' Lebryk says. 'Waiting to switch also could put your money at risk,especially during the approaching holiday season, which is the peak time of year for financial crimes. As you gather with family, it may be a good time to remind aging relatives about the new requirement.'
There are many other benefits to electronic payments, such as eliminating the need to visit a bank or credit union to cash or deposit a check. Federal benefit recipients know their money is available to access on payment day every month. The switch to electronic payments will also save taxpayers $1 billion over 10 years.
Electronic payment options
Since May 1, 2011, all people newly applying for federal benefits, including Social Security, Supplemental Security Income (SSI), Veterans Affairs, Railroad Retirement Board, Office of Personnel Management benefits and other non-tax payments, have had to choose direct depositor a Direct Express(R) card when they sign up for the benefit.
March 1, 2013, is the final deadline when all remaining federal benefit check recipients must start receiving their money electronically.
For federal benefit recipients who do not have a bank or credit union account, or prefer a prepaid card, the U.S. Department of the Treasury recommends the Direct Express(R) card. With the Direct Express(R) card, money will be posted to the card account on payment day each month. There are no sign-up fees, overdraft fees or monthly fees. Some fees for optional services may apply. For information on card fees and features, visit http://www.godirect.org.
Fast, easy and free to switch
Federal benefit recipients can switch to electronic payments online at http://www.godirect.org or through the U.S. Treasury Electronic Payment Solution Center toll-free at 1-800-333-1795.
The preceding information has been provided by the U.S. Department of the Treasury, Financial Management Service.
The Go Direct(R) campaign is sponsored by the U.S. Department of the Treasury and the Federal Reserve Banks. TheGo Direct(R) and Direct Express(R)logos,Go Direct(R) andDirect Express(R) are registered service marks of the U.S. Department of the Treasury, Financial Management Service (used with permission).The Direct Express(R) Debit MasterCard(R) card is issued by Comerica Bank, pursuant to a license by MasterCard International Incorporated. MasterCard(R) and the MasterCard(R) Brand Mark are registered trademarks of MasterCard International Incorporated.