All federal benefit payments go electronic March 1, 2013

Paper checks a thing of the past: federal benefit payments will only be available to recipients electronically via direct deposit to a savings, checking or prepaid card after March 1, 2013.

Beginning March 1, 2013, the federal government will no longer be issuing paper checks as payment for federal benefits in the following programs: Social Security, Supplemental Security Income, Veterans Affairs, Railroad Retirement Board, Office of Personnel Management and Department of Labor (Black Lung).

People who are currently getting benefit checks in the mail must switch to an electronic payment option, direct deposit to a savings or checking account held at a bank or credit union by March1, 2013. If you do not choose an electronic payment option by the March 31 deadline payments will be received via a Direct Express Debit MasterCard and will not experience any interruption in their payments.

The Direct Express® Debit MasterCard® is a prepaid card, a financial management tool and not a credit card. The card is only worth what has been deposited on it. It is not necessary to have a bank account or undergo a credit check to utilize the card. Most cards are FDIC insured up to $250,000 just like a bank account. Carrying a card can be much safer and, in some cases, more convenient that carrying cash. They eliminate the risk of stolen checks, help protect people from financial crime and provide people with more control over their money. It is important to be aware that these cards have a wide and varying range of user fees. The Michigan State University Extension article “Prepaid cards: a tool or trap?” outlines how these cards work and how to find one that best fits your needs.

This move to all-electronic federal benefit payments provides significant saving as it will eliminate the $120 million price tag associated with paper checks. Electronic payments to savings, checking or prepaid cards are safer, easier and more convenient for benefit recipients.

The Go Direct campaign is helping federal benefit recipients sign up for, or transition to, electronic payments. If the benefit recipient has a bank or credit union account, they should sign up for direct deposit on line or by calling 1-800-333-1795 or by visiting their local bank/credit union branch or federal benefit agency office. If the benefit recipient prefers a prepaid debit card or doesn’t have a bank account, they can call 1-800-333-1795 or notify their local federal benefit agency.

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