Direct deposit of fed benefits?
Thursday, December 23, 2010
If you get a check in the mail for your federal benefits,
changes are coming. The Treasury Department will soon switch
from paper checks to direct deposit payments of federal benefits,
including Social Security, Veterans Affairs payments and pension
benefits.
About 8 of every 10 Americans already receive federal benefits
electronically, so most will not see a change. If you object
to direct deposit, there is another option: a Direct Express
MasterCard debit card with no sign-up, monthly, or overdraft
fees. About 1.5 million people have signed up for the debit
option since it was introduced in 2008.
It is estimated that phasing out paper checks will save Social
Security $1 billion over the next decade. The federal
government has been transitioning to electronic deposits of
benefits because it is considered the safest and most reliable
method. Treasury believes it lowers the risk of
identity theft, and eliminates problems like losing a check, or
having one taken from your mailbox.
If you currently receive Social Security or other federal
benefits by check, you can learn how to switch to direct deposit or
the debit card by calling toll-free 800-333-1795. In
addition, you can visit www.godirect.org. You
will need to switch to electronic payments by March 1, 2013.
Treasury, after hearing concerns from consumer advocates, will
permit some to continue receiving regular paper checks,
including those who are 90 years or older and some who live in very
remote areas. Please call 800-333-1795 with any
questions.
New applicants for federal benefits will receive payments
electronically starting in May 2011.
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