Get A Social Security Check? Treasury Says It's Time To Go Electronic

Feb 19, 2013
Originally published on February 19, 2013 12:33 pm

Every month, the government sends out about 5 million checks to Americans who receive federal benefits. On March 1, the Treasury Department is making those paper checks a thing of the past.

Since May 2011, all new Social Security recipients are required to get direct deposit of their benefits. Some 93 percent of all recipients now do.

But there are still holdouts, so the Treasury Department started a campaign and a website, Go Direct, in an effort to convince the remaining 7 percent.

The department is prodding people to switch for one big reason: cost. Treasury spokesman Walt Henderson says the government will save $1 billion over 10 years by not having to print paper checks.

"It costs us about a little over a dollar to issue a paper check. It costs us 10 cents for an electronic payment," he says. "There's the postage, the production and the cost of the paper and so on that won't be needed with electronic payments."

The government wants all benefit recipients to switch to electronic payments, including those who get Social Security, veterans benefits and federal employee retirement checks. Folks who don't will still get their checks, Henderson says, but they'll also get some personalized attention from Treasury.

"We won't interrupt the payment. We want to see how many people comply and reach out to people in a more direct way through the mail and see if we can assist them in complying with the requirement," he says.

As an alternative to direct deposit, recipients can get debit cards, although there are fees.

AARP has another worry. "We're very concerned about fraud," says Cristina Martin Firvida, the senior lobby's director of financial security.

"To be fair, fraud is a problem whether you have a paper check or whether you have direct deposit or a debit card," she says. "Changing from a check to debit card merely changes the schemes for the fraud."

Firvida says AARP is in talks with the Treasury Department over how to increase safety for the debit cards.

The department says debit cards and direct deposit are actually more secure than paper checks, which get stolen and fraudulently endorsed.

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Transcript

RENEE MONTAGNE, HOST:

Now to something that seems downright ancient after that story: paying someone with a paper check. The government still sends out about five million paper checks a month to Americans who receive Social Security benefits. Most people on Social Security do get their benefits electronically deposited into their bank accounts. And as of March 1st, the Treasury Department hopes to leave paper checks in the past, once and for all. Here's NPR's Brian Naylor.

BRIAN NAYLOR, BYLINE: Since May of 2011, all new Social Security recipients have had no choice but to get direct deposit of their benefits. And some 93 percent now do. But there are still holdouts, so the Treasury Department has a campaign and a website called GoDirect.org in an effort to convince the remaining 7 percent.

(SOUNDBITE OF ADVERTISEMENT)

UNIDENTIFIED MAN: The following is an important message from the U.S. Department of the Treasury.

UNIDENTIFIED WOMAN: Do you or a loved one get federal benefit payments by a paper check? By March 1st, 2013, you're required to switch to electronic payment.

NAYLOR: The Treasury is prodding people to switch for one big reason: cost. Treasury spokesman Walt Henderson says the government will save a billion dollars over 10 years by not having to print paper checks.

WALT HENDERSON: It costs us about a little over a dollar to issue a paper check. It costs us 10 cents for an electronic payment. So, again, there are significant savings.

NAYLOR: The government wants all benefit recipients to switch to electronic payments, including those who get Social Security, veterans benefits and federal employee retirement checks. Folks who don't will still get their checks, but also some personalized attention from Treasury, says Henderson.

HENDERSON: We won't interrupt the payment. We want to see, you know, how many people comply and reach out to people in a more direct way through the mail and see if we can assist them in complying with the requirement.

NAYLOR: As an alternative to direct deposit, recipients can also get debit cards, although there are fees. AARP, the senior lobby, has another worry: scams. Cristina Martin Firvida is AARP's director of financial security.

CRISTINA MARTIN FIRVIDA: We're very concerned about fraud. Now, to be fair, fraud is a problem, whether you have a paper check or whether you have direct deposit or a debit card. Changing from a check to debit card merely changes the schemes for the fraud.

NAYLOR: Firvida says AARP is in talks with the Treasury Department over how to increase safety for debit cards. The department says debit cards and direct deposit are actually more secure than paper checks, which get stolen and fraudulently endorsed. Brian Naylor, NPR News, Washington.

(SOUNDBITE OF MUSIC)

MONTAGNE: You're listening to MORNING EDITION from NPR News. Transcript provided by NPR, Copyright NPR.