The Social Security Administration (SSA) is moving away from paper checks and going to an all-electronic mode. Will you be impacted? Read on for all of the details of this latest move by the government agency.

Social Security Payments Going Electronic

The federal government is going all-electronic this month. Following an executive order by President Donald Trump in March, social security payments and other forms of federal benefits are phasing out paper checks. The executive order mandated the transition to electronic payments by September 30.

According to the White House, the decision is designed to reduce fraud and spending. The executive order details that paper checks from the Treasury Department are more susceptible to theft, loss, or return when compared to electronic transfers.

The move will also save money. The SSA said it costs approximately 50 cents to issue a paper check. This compares to an electronic funds transfer costing less than 15 cents per transaction. Electronic Funds Transfers (EFTs) are typically processed more quickly than traditional paper checks, getting the funds into the hands of beneficiaries faster and with little room for error.

The SSA and the Department of Veterans Affairs confirmed that most beneficiaries of these programs already receive their funds electronically. For example, fewer than 1% of Social Security recipients get their payments via paper check. Likewise, more than 97% of the Veterans Administration benefit payments are sent electronically. These figures have been increasing in recent years as more recipients discover the ease and benefits of electronic transfers.

What You Need to Know if You Receive Paper Checks

Beneficiaries of these federal funds who already receive electronic payments do not need to take any action. Your payments will continue to be processed as scheduled. Those who still receive funds via paper checks will need to enroll in the direct deposit program. You can do this by calling the agency charged with distributing the payments. Alternatively, the Treasury Department confirmed that you can enroll online at GoDirect.gov or by calling the general electronic payment solution center at 800-967-6857.

Recognizing that not all beneficiaries have a bank account capable of receiving the direct deposit, the Treasury Department is advising them to open one at FDIC: GetBanked or MyCreditUnion.gov. Beneficiaries can also choose to receive their payments electronically using a debit card sponsored by the Treasury Department. Those who choose this method should call the agency's electronic payment solution center at 800-967-6857. You can also contact the specific agency responsible for disbursing the payments for further assistance.

A spokesperson for the SSA said that some beneficiaries may still be able to receive paper checks after the September 30 deadline. In addition, the Veterans Administration is required by federal law to provide paper checks to beneficiaries who request this form of payment.

Critics of the move away from paper checks note that the electronic transition may be challenging for some populations. For instance, the homeless and disabled do not always have access to electronic payments. Some groups are also concerned about the lapse in payments if a beneficiary has to go through the waiver process to continue to receive paper checks. Lastly, senior citizen advocates are worried that beneficiaries may be more vulnerable to phishing scams if they are new to the world of electronic banking.

The Treasury Department has listed a number of ways that recipients may qualify for a waiver. These include exceptions for individuals who live in remote areas without the necessary infrastructure to make electronic payments accessible. Other exceptions include recipients aged 80 or older or people with mental impairments. Treasury officials said that they are working on updating the guidance on issuing waivers as they receive more feedback about the process.

Did you find this content useful? Feel free to bookmark or to post to your timeline for reference later.