Say Goodbye To Paper Social Security Checks
Even though 93 percent of social security and other related benefits are being paid out electronically, there are still millions of Americans receiving paper checks in the mail, roughly five million of them. Paper Social Security checks will be suspended as of March. Therefore, if you are a recipient of one, you have less than two months to make arrangements, as all payments will now be made via electronic automatic deposit.
The federal government is moving away from paper checks in favor of direct deposit or prepaid “Direct Express” debit cards. They initially began this process March 2011. The Treasury Department has since required all new applicants receiving federal benefits to sign up for electronic payments. The deadline for everyone else, who is still getting a paper check, to follow suit is March 1, 2013, according to CNN Money. Anyone who fails to make the change will still receive a paper check, but will be the aggressively pursued by the administration to set up an electronic deposit. Expect to hear from them often if you don’t.
This transition is an effort to save on processing costs. It can cost as much as $4.6 million in monthly expenses to process and mail paper checks versus less and $1 to transfer a direct deposit, according to Treasury officials. Electronic payments are also considered safer than paper checks. More than 440,000 Social Security checks were reported lost or stolen, while $70 million worth of checks were fraudulently endorsed in 2011.
Failure to switch recipients to the electronic funds systems could needlessly cost taxpayers $1 billion over the next decade in processing fees.
To avoid concerns over fraud, Social Security Administration officials warn seniors and other benefit recipients that identity thieves can redirect payments to other bank accounts using stolen information. Be mindful of identity threats. Do not throw away documents or financial statements. Sensitive documents should be stored or destroyed. Consider online credit monitoring that provides activity alerts on credit reports.
Never provide personal information to unsolicited sources. If someone calls claiming to be an employee of the Social Security Administration, be aware that it is not policy for administrators to call and ask for personal information. To report suspicious activity, contact the Social Security Fraud Hotline at 1-800-269-0271.
To sign up for benefits, recipients can visit GoDirect.org, call atoll-free helpline at 1-800-333-1795, or speak with local bank or credit union representatives.
Recipients must have their Social Security or claim number, 12-digital federal benefit check number, and the amount of their most recent benefit check. For direct deposit, recipients also will need their financial institution’s routing transit number (often found on a personal check), account number, and account type (checking or saving).