EagleTribune.com, North Andover, MA

January 20, 2013

US eliminating paper benefit checks as of March

By Patricia Sabatini
Pittsburgh Post-Gazette

---- — The U.S. Treasury Department is making a final push to prod people who still receive Social Security and other federal benefit checks in the mail to save taxpayers big bucks and sign up for direct deposit.

Two years ago, the department issued a rule setting a March 1, 2013, deadline for phasing out paper benefit checks.

While roughly 90 percent of people already have converted to electronic payments, the department still issues some 5 million benefit checks per month.

Eliminating those remaining checks would save taxpayers about $1 billion over the next 10 years, the department said. Producing and mailing a paper check costs the government $1.02 vs. 10 cents for an electronic payment.

“Switching to electronic payment is not optional — it’s the law,” said David Lebryk, commissioner of Treasury’s financial-management service.

People who do not have an account with a bank or credit union can have payments electronically deposited onto a prepaid debit card called Direct Express Debit MasterCard. Enrollees receive the card in the mail and payments are automatically credited to the card each month.

Money on the card can be used to pay bills and make purchases anywhere that accepts MasterCard. There are no sign-up fees or monthly fees. Recipients can withdraw cash from the card at an ATM once a month at no charge. After that, withdrawals cost 90 cents. Lost cards are replaced one time for free. Subsequent replacement cards cost $4.

The downside to having benefits loaded onto a card is that recipients could get hit with a fee, say for making more than one cash withdrawal per month, Treasury Department spokesman Walt Henderson said.

Beyond a natural tendency to procrastinate, misunderstandings about how direct deposit works could be preventing some people from converting to electronic payments, he said.

“We are reassuring people they don’t have to get on the Internet or use a computer or buy a computer” to take advantage of direct deposit, he said.

Although the deadline for people to sign up for electronic payments is less than two months away, those who don’t comply won’t stop receiving their benefits.

“We realize there are unique circumstances, so we are not going to cut off a person’s check. But we will be reaching out to make sure they understand the requirement,” Henderson said.

“We’re pretty confident the vast majority of people have gotten word.”

In a relatively small number of cases, the government is allowing people to continue receiving paper checks.

Automatic waivers are being granted to anyone 90 or older as of May 1, 2011. People living in remote areas without sufficient banking services and certain people with mental impairments also may apply for a waiver.

Waiver applications are available at 1-800-333-1795. For more information: www.GoDirect.org, or call 1-800-333-1795.

Contact Patricia Sabatini at psabatini@post-gazette.com. Distributed by Scripps Howard News Service, shns.com.