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Saturday, April 30, 2011

The Check Is Not in the Mail: Social Security checks will no longer be an option: April 28 2011 NYTimes

Starting next week, anyone applying for Social Security, Veterans Affairs or other federal benefits should expect to receive their money electronically — paper checks will no longer be an option. Most of those already getting paper checks have until March 1, 2013 — a slight reprieve — to set up electronic deposit.

It’s about time, actually,” said Rosie Rios, the United States treasurer, in an interview. “We’ve been offering electronic deposit for over 35 years — already eight in 10 people have their funds deposited electronically. This is really a great way for people to have a safe, easy and convenient way to get their funds.”

The move also is a way for the federal government to save money. It costs 92 cents more to print a check than to issue the amount electronically. By phasing out paper checks, the Treasury Department expects to save Social Security $1 billion over the next decade.

For older adults comfortable with computers and online banking, the move should prove fairly seamless. But not everyone is. I have tried to introduce my parents, ages 73 and 66, to Internet banking and direct-deposit tax refunds, and it’s still a multiyear work in progress. Aware of the uninitiated, the Treasury Department has begun a public education campaign. Ms. Rios hopes adult children and other family caregivers will get involved.

I sat down with my mom and I explained this to her, and she’s not one who either has a computer or has any interest in a computer,” said Ms. Rios. She said she told her mother “that there are options available in terms of speaking to a live person via phone, setting this up pretty easily with a little bit of information.”

She also explained “the benefits of what it means to have her money immediately.” Electronic payments become available in bank accounts and on debit cards just after midnight on the day of payment.

People who are, as Ms. Rios put it, “unbanked” can sign up for Direct Express, a preloaded debit card that can be used at stores that accept debit or credit cards. It includes one free monthly A.T.M. withdrawal, provided that you use certain A.T.M.’s; additional withdrawals cost 90 cents. Cardholders can check their balances online, by phone or at A.T.M.’s free of charge, but — in keeping with phasing out that paper — receiving statements in the mail will cost 75 cents a month.

Electronic payments are safer than paper checks, Ms. Rios pointed out. The Treasury Department counted more than 540,000 checks lost or stolen last year, compared with 184,000 reported problems with electronic payments. It is also easier to fix payment issues via direct deposit.

But not everyone has to sign up for electronic payments. People ages 90 and older who receive paper checks will not be asked to make the switch.

How to Sign Up
Online: www.godirect.org
Phone: 800-333-1795
Mail: Fill out this form.
More information on Direct Express, the preloaded debit card, is available here.

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