Starting this week, anyone signing up to receive Social Security benefits will have only one option – direct deposit. New recipients will no longer be able to receive a paper check, delivered through the mail.
“Getting your Social Security or Supplemental Security Income payment by direct deposit or Direct Express is safer and more reliable,” said Michael J. Astrue, Commissioner of Social Security. “You don’t have to worry about your check being lost or stolen and your money is available immediately on your payment date There is no need to wait for the mail to arrive.”
For consumers, the government says there is added security and speed in receiving their money. Last year, the Treasury Department says, more than 540,000 Social Security and Supplemental Security Income checks were reported missing or stolen and had to be replaced.
For the government, there is a big cost savings. The cost of printing and mailing checks will eventually disappear as new recipients begin receiving their benefits electronically.
The Social Security Administration estimates the cost to generate and mail each paper check at around 92 cents. More than 18 million Baby Boomers are reaching retirement age over the next five years and every day 10,000 people become eligible for Social Security benefits. The savings, the government says, will add up.
The new Treasury Department rule will eventually phase out paper checks for federal benefit and non-tax payments by March 1, 2013. Anyone applying for benefits from now on will receive their payments electronically, while those currently receiving paper checks will need to switch to direct deposit by March 1, 2013.
How to make the switch
Consumer who currently receive paper checks, but would like to switch to direct deposit, are encouraged to do so. You'll need your routing transit number and type of account (checking or savings). If you don't have a bank account, you can have your money put onto a pre-paid debit card.
The switch can be made online at www.GoDirect.org, calling the U.S. Treasury Electronic Payment Solution Center at 1-800-333-1795 or by speaking with a representative from your bank or credit union.