The U.S. Department of the Treasury is retiring the paper Social Security check for millions of baby boomers and others applying for federal benefits, a move that will save taxpayers $1 billion over the next 10 years.
Beginning May 1, 2011, anyone newly applying for Social Security, Veterans Affairs or other federal benefits will need to choose an electronic payment method – paper checks will no longer be an option.
People currently receiving their federal benefits by paper check must switch to direct deposit by March 1, 2013.
The Treasury Department published a final rule in December 2010, to gradually eliminate paper checks for federal benefit payments.
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. 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)
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 MasterCardcard. For more information, visit www.GoDirect.org.
Current check recipients must switch to electronic payments before March 1, 2013. Switching from checks to direct deposit is fast and free at 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.
The U.S. Department of Treasury says the switch to electronic payments means taxpayer savings will total $1 billion over the next 10 years. It costs 92 cents more to issue a payment by paper check than by direct deposit.
Officials add that electronic payments are safer than paper checks. Last year alone, more than 540,000 Social Security paper checks were reported lost or stolen and had to be replaced – while $93 million-worth of Treasury-issued checks were fraudulently endorsed in 2010.