Recently, a new rule was announced by the U.S. Department of Treasury that individuals who receive certain federal benefits will be given payment electronically rather than by paper check. The new rule applies to people who are currently given benefits under Veterans Affairs, Supplemental Security Income, Social Security, Railroad Retirement Board, Office of Personnel Management, and the Department of Labor (Black Lung), and they will have to switch to direct deposit by March 1, 2013. Anyone who applied for benefits on or after May 1, 2011, automatically will begin to receive their benefits electronically. For those who currently receive payment via paper check, they will be required to switch to electronic Social Security disability payment by March 1, 2013.
Millions of Americans depend on these benefits to make ends meet. The new paperless payment system gives benefit recipients a safer and more reliable way of receiving the benefits they need. Receivers of these benefits will not need to wait for their check to arrive via the mail and will instead be immediately paid on their specific payment date. The system also gives benefit recipients peace of mind that their check will not be lost or stolen.
The new paperless Social Security payment system will also save taxpayers in America millions of dollars per year. Previously, paper checks cost taxpayers $120 million per year, and it is expected the new system will save $1 billion over the next 10 years. Electronic payment to benefit recipients will also help the environment by saving 12 million pounds of paper in just the first five years of the implementation of the new system.
The Treasury also offers benefit recipients the option of transferring payment to a DirectExpress Debit MasterCard instead of direct deposit. These cards do not require a bank account, and also does not charge fees for sign-up, having a monthly account, or overdrafts, and are similar to ATM cards. The money is also insured by the Federal Deposit Insurance Corporation (FDIC).