Paper Social Security checks will become obsolete in May


Charles S. Clark
Government Executive.com
December 21, 2010

A long-planned requirement that Social Security recipients receive their checks through direct deposit will take effect May 1, 2011, three months later than originally proposed, the Treasury Department’s Financial Management Service announced Tuesday.

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“This important change will provide significant savings to American taxpayers who will no longer incur the annual $120 million price tag associated with paper checks and will save Social Security $1 billion over the next 10 years,” said Treasury Fiscal Assistant Secretary Richard L. Gregg. The switch also is aimed at reducing incidents of loss or theft, claims that require the Social Security Administration to re-cut 600,000 checks in an average year.

Currently, eight out of 10 recipients among the 58 million retirees, disabled Americans and surviving family members already receive their monthly benefits electronically, Treasury reports. But after advocacy groups for the elderly worked with officials in finalizing the rules, recipients who were born before May 1, 1921 — an estimated 275,000 Americans — will be allowed to continue to receiving paper checks. Others who live far from banks where they could make direct deposit arrangements also can petition for an exception.

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Since passage of the 1996 Debt Collection Improvement Act, the government has been working toward electronic delivery of all government checks except refunds from the Internal Revenue Service, including Supplemental Security Income and benefits from the Veterans Affairs Department, Railroad Retirement Board, and Office of Personnel Management.

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