March 1 is the end of the paper check from the federal government. On that date, the Treasury Department will only be issuing benefit payments in an electronic format. These changes apply to Social Security Administration (SSA) benefits, including Old Age, Supplemental Security Income (SSI) and Social Security disability insurance benefits (SSDI). It also includes veteran’s benefits and federal employees.
The change only affects a small portion of benefit recipients, as SSA reports most payments are already made electronically. Those who became eligible for Social Security benefits within the last year were required receive them electronically.
Paper checks can be lost or stolen, and it is hoped that use of electronically delivered benefit checks should reduce the problem of lost or stolen checks. In 2010, SSA reports 540,000 checks were lost or stolen.
There are two ways to receive your Social Security retirement or disability insurance payments. Direct deposit can be used to place the money into your checking or savings account at any bank.
Your other option is the “Direct Express” card, which looks like a MasterCard debit card. It can be used like any other debit card, and your money in the account is insured by FDIC.
The Direct Express card can be used at ATMs. You can make one free cash withdrawal per month with the card. After that, a $0.90 per transaction fee is added.
There are other charges for optional services. If you have questions, the federal government’s GoDirect website for information and a toll free phone number.
Overall, the Social Security Administration expects to save $120 million a year in printing and mailing costs. Over the next decade, saving of over $1 billion, because they won’t have to mail checks to the largest segment of the baby boom.
Source: The Daily Journal, “Social Security/Disability will go paperless March 1,” Pat Pratt, January 22, 2013