Paper Social Security checks will become obsolete in May

A long-planned requirement that Social Security recipients receive their checks through direct deposit will take effect May 1, 2011, three months later than originally proposed, the Treasury Department's Financial Management Service announced Tuesday.

"This important change will provide significant savings to American taxpayers who will no longer incur the annual $120 million price tag associated with paper checks and will save Social Security $1 billion over the next 10 years," said Treasury Fiscal Assistant Secretary Richard L. Gregg. The switch also is aimed at reducing incidents of loss or theft, claims that require the Social Security Administration to re-cut 600,000 checks in an average year.

Currently, eight out of 10 recipients among the 58 million retirees, disabled Americans and surviving family members already receive their monthly benefits electronically, Treasury reports. But after advocacy groups for the elderly worked with officials in finalizing the rules, recipients who were born before May 1, 1921 -- an estimated 275,000 Americans -- will be allowed to continue to receiving paper checks. Others who live far from banks where they could make direct deposit arrangements also can petition for an exception.

Since passage of the 1996 Debt Collection Improvement Act, the government has been working toward electronic delivery of all government checks except refunds from the Internal Revenue Service, including Supplemental Security Income and benefits from the Veterans Affairs Department, Railroad Retirement Board, and Office of Personnel Management.

Social Security recipients who don't have a bank or credit union account or who prefer using a credit card account have the option of using the Direct Express Debit MasterCard card account. More than 1.5 million beneficiaries have signed up for Direct Express since 2008.

Current Social Security recipients who receive paper checks must make arrangements for electronic deposit by March 1, 2013, either online or by phoning 1-800-333-1795. Americans who become eligible for benefits after May 1, 2011, will be required to use direct deposit.

To promote awareness and ease the transition, Treasury upgraded a special website at www.GoDirect.org, and will follow up with public service announcements and a financial literacy campaign in cooperation with hundreds of national, regional and local organizations.

Advocacy groups for the elderly generally were pleased with the final arrangements. "The Social Security Administration has always been aware of the special needs of the populations they serve," Barbara Kennelly, president and chief executive officer of the National Committee to Preserve Social Security and Medicare, told Government Executive.

"Including ample time for seniors to adjust to a paperless benefits system has clearly been their priority, which we applaud. Based on surveys of our own members, we know that seniors are more comfortable with current banking technology so we don't see this as a roadblock to their daily banking or purchasing needs."

AARP was more cautious in its support. "While initiatives such as this can increase Social Security's efficiency, reduce fraud and abuse, and save money … we need to balance those goals with protecting millions of older Americans who stand to see significant changes, or may face new challenges," said Cristina Martin-Firvida, director of economic security in government relations at AARP.

"The new regulations clearly favor the move to paperless benefits for more people in Social Security, but they also provide some important protections for individuals who will still need to receive paper checks, which is why we're committed to working with the administration to explore all opportunities to educate Americans about their safe and secure choices for receiving the benefits that they earned," Martin-Firvida said.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

    Download
  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

    Download
  • Federal IT Applications: Assessing Government's Core Drivers

    In order to better understand the current state of external and internal-facing agency workplace applications, Government Business Council (GBC) and Riverbed undertook an in-depth research study of federal employees. Overall, survey findings indicate that federal IT applications still face a gamut of challenges with regard to quality, reliability, and performance management.

    Download
  • PIV- I And Multifactor Authentication: The Best Defense for Federal Government Contractors

    This white paper explores NIST SP 800-171 and why compliance is critical to federal government contractors, especially those that work with the Department of Defense, as well as how leveraging PIV-I credentialing with multifactor authentication can be used as a defense against cyberattacks

    Download
  • Toward A More Innovative Government

    This research study aims to understand how state and local leaders regard their agency’s innovation efforts and what they are doing to overcome the challenges they face in successfully implementing these efforts.

    Download
  • From Volume to Value: UK’s NHS Digital Provides U.S. Healthcare Agencies A Roadmap For Value-Based Payment Models

    The U.S. healthcare industry is rapidly moving away from traditional fee-for-service models and towards value-based purchasing that reimburses physicians for quality of care in place of frequency of care.

    Download
  • GBC Flash Poll: Is Your Agency Safe?

    Federal leaders weigh in on the state of information security

    Download

When you download a report, your information may be shared with the underwriters of that document.