Have You Gone Electronic?

Have You Gone Electronic?

Are you still receiving Social Security checks in the mail? If so, you may be out of compliance with the law. March 1, 2013 was the deadline for people to sign up to receive their Social Security benefits electronically. While there are some exceptions, most people must switch to electronic payments due to a final rule published by the U.S. Treasury Department in December 2010. This rule called for a gradual phase-out of paper checks over a 2-year period for several federal benefit programs, including Social Security and Veterans benefits. Since May 2011, all new applicants for such programs automatically receive their benefits electronically, choosing to get their benefits through one of two options: direct deposit or the Direct Express® card.

If you missed the March 1st deadline, you can still sign up for electronic benefit payments. See below for information about your options, how electronic payments work, which federal benefit programs mandate electronic payment, how to apply and links to resources for additional information.

What is the Direct Express® card?

The Direct Express® card account works much like an ATM card. If you choose this option, the government deposits your benefit payment into your card account and you use it like a prepaid debit card, using electronic transactions to access your money instead of using cash for purchases. You do not need a bank account to use the Direct Express® card. While many services with the Direct Express® card are free, small fees apply for optional services. See the websites listed below for details.

What is direct deposit?

The other option, direct deposit, is where the government transfers your benefit payment into your bank, savings and loan or credit union’s account via an electronic message. You can then withdraw money, put some into another account or pay bills, etc.

Why did the government start this changeover to electronic payments 2 years ago?

There are a number of reasons, including safety, convenience and financial savings for the government and taxpayers, according to the U.S. Treasury Department.

Electronic payments are considered safer because you don’t need to worry about lost or stolen checks. In 2010, over half a million Social Security checks were reported lost or missing. This loss caused delays for beneficiaries in receiving their benefits and increased costs for the federal government in tracing and replacing these checks.

In contrast, there are no delays and nothing is lost in direct deposit. If your Direct Express® card is lost or stolen, you can replace it (one free replacement card per year) and should report it immediately.  Your liability is limited for unauthorized transactions reported in a timely manner. For example, Direct Express® card holders who report a transaction within 2 business days of learning of the loss or theft cannot be held liable for more than $50.

Electronic payments are convenient because benefit payments are available for use immediately on your payment day. You no longer need to wait for your checks to arrive and then go somewhere to cash or deposit them. Electronic payments also save the government and taxpayers the huge cost of mailing paper checks, not to mention saving paper and trees, which helps the environment. Twelve million pounds of paper will be saved between 2011-2015 alone.

Does everyone have to receive his/her payments electronically?

Yes, but there are a few exceptions. Recipients who are 92 years of age or older (people born on 5/01/21 or earlier) are automatically granted waivers, meaning they are not required to switch to electronic payment. They will continue to receive a paper check. Recipients who live in remote areas without sufficient banking infrastructure, or those for whom an electronic payment would impose a hardship due to a mental impairment, can apply for a waiver from the U.S. Treasury. You can receive a waiver application by calling 800-333-1795. (Note: the SSA does not grant waivers; only the U.S. Treasury can grant them.)

If you are out of compliance and have not yet signed up to receive electronic payments through Direct Express® or direct deposit, you will continue to get checks mailed to you in the interim. The U.S. Treasury, however, will contact you by mail about switching over or applying for a waiver.

Are electronic payments only for Social Security benefits, or are they also used for other government benefits?

Since May 1, 2011, people receiving Supplement Security Income, Veterans Administration (VA) benefits, Railroad Retirement benefits or Federal retirement benefits also receive their benefits via the Direct Express® card or direct deposit.

How do I sign up?

If you missed the March 1st deadline and are still receiving paper checks, you can sign up for direct deposit or the Direct Express® card via phone or Internet by calling toll-free 1-800-333-1795 or visiting GoDirect.org. You can also apply for direct deposit by mail. The GoDirect campaign is sponsored by the U.S. Department of the Treasury and the Federal Reserve Banks.

Where can I get more information?

For more information on your electronic payment options, see the following resources:

Our blogger Karen J. Fletcher is CHA's publications consultant. She provides technical expertise, writing and research on Medicare, health disparities and other health care issues. With a Masters in Public Health from UC Berkeley, she serves in health advocacy as a trainer and consultant. See her current articles.