U.S. Treasury Phases Out Checks
Moving to electronic payments for government benefits is expected to save Social Security $1 billion.
The U.S. Department of the Treasury is officially moving from checks to electronic payments. The government agency has announced that anyone applying for federal benefits on or after May 1, 2011, will receive their payments electronically, while those already receiving paper checks will need to switch to direct deposit by March 1, 2013. The Treasury Department's Go Direct public education campaign will provide information to Americans about the change to how federal benefit payments are being delivered. <
Cutting Paper Checks, Saving Taxpayer Money
David A. Lebryk
12/21/2010
$120 million.
That’s the annual price tag to mail millions of paper benefit checks for Social Security and other critical government programs to Americans across the country.
However, there’s a better way to deliver these payments. A way that not only reduces the deficit and saves taxpayers money, but is also safer and more secure for benefit recipients.
Eight in 10 federal benefit recipients currently use direct deposit. Because they do, they receive their payments faster, more conveniently, and at a much lower risk for theft or fraud.
Today, we are taking an important step to extend the safety and reliability of electronic direct deposit to all federal benefit recipients.
With the publication earlier this morning of a final rule in the Federal Register, anyone who applies for federal benefits on or after May 1, 2011 will receive their payments electronically – by direct deposit to a bank or credit union account or to a Direct Express®Debit MasterCard® card account. Those who already get paper checks will need to switch to electronic payment by March 1, 2013.
Individuals who currently receive benefit payments electronically won’t need to take any action. They’ll continue to get their payments in the exact same manner. And for those that now use a paper check, they’ll soon experience the benefits of receiving their money in the safest, most reliable way possible.
The conversion from paper to electronic payment is a long-standing goal for Treasury. With this change and the publication of the final rule, we’re the closest we’ve ever been to an all-electronic Treasury, which will save taxpayers more than $1 billion over the next ten years.
While these changes deliver significant positive benefits to payment recipients and taxpayers, we recognize that the adjustment to direct deposit may present more challenges for some Americans than others. Throughout the process of writing these new rules, we listened to the voices of consumer advocates and responded to ensure that the transition to electronic payments is as smooth as possible.
For example, we have provided a few tailored exceptions to the electronic payment requirement for those over 90 years old, as well as for those for whom the requirement creates a hardship due to his or her mental impairment or remote geographic location. Additionally, Treasury is launching a national campaign today to inform Americans about the rule change and to help them understand what they need to do to get their payments electronically. The Go Direct® campaign will work with more than 1,400 national, regional and local partner organizations to ensure federal benefit recipients are well informed about the rule change and how to make the switch before the two federal deadlines. The campaign will feature information enclosed with millions of check payments, public service announcements, a newly redesigned website,www.GoDirect.org, and ongoing financial literacy programming.
It’s a proud day for Treasury and good news for the millions of Americans who will soon receive their payments through safe and secure direct deposit.
David A. Lebryk is Commissioner of the U.S. Department of the Treasury's Financial Management Service
