The Treasury Department issued a new rule under federal regulation that all federal benefits go paperless.
Benefits, including Supplemental Security Income and Veterans Affairs payments, switch from checks to e-deposits or Direct Express debit card—electronic payments.
People receiving the benefits have about two years to sign up for the new system. However, the federal regulation does not affect federal agency pension payments, such as military retirement. Only payments made through the Treasury Department will see the change.
On the one hand, the new rule received praise for potentially saving American’s about $120 million a year in taxes associated with paper check costs, according to Treasury Fiscal Assistant Secretary Richard Gregg.
However, some critics think the bill causes problems for older Americans, especially veterans, who are not technology savvy.
So, the Treasury Department did include some exceptions in the rule. People age 90 and above, the mentally impaired and ones living in highly remote areas will continue to receive paper checks.
Even though there has been a significant rise in identity theft statistics perpetrated online and through electronic systems, Social Security Commissioner Michael Astrue feels the urgent change to the system prevents more occurrences of lost or stolen checks. Recipients would also have instant access to their benefits as opposed to waiting for the mail.
Anyone who applies for federal benefits now receives their payment through e-deposit on or after May 1, 2011. March 1, 2013 is the final deadline for recipients to sign up for the electronic payments.
However, Astrue urges people to make those changes now.
“I urge everyone receiving a paper Social Security or Supplemental Security Income check to switch to electronic payments now, through the Go Direct campaign, rather than waiting until the final deadline,” Astrue said in an announcement. “Switching now eliminates the risks of lost and stolen checks, and provides immediate access to your money on payment day.”
Recipients can go to the Go Direct website or call 800-333-1795 to update their payments to e-deposit.
Photo thanks to Money Blog Newz under creative common license on Flickr.