A NEW law that could disrupt monthly distributions for Social Security recipients is officially in effect.
The legislation scraps a crucial payment method, and Americans who didn’t take action in recent months could face delays.
Action is required to prevent payment delays for many seniors (stock image)[/caption]
For several reasons — including the reduction of costs and the prevention of delays, fraud risk, lost money, and theft — the US Treasury is no longer sending out paper checks in the mail for federal service programs as of September 30.
This includes those from the Social Security Administration (SSA) to the around 74 million Americans who get the monthly benefits.
While the change only affects less than 1% of all recipients who still get the physical checks, that’s still about 400,000 people.
The Trump administration announced the decision to move away from paper checks in an executive order on March 25.
According to data from the government, the paper checks are at least 16 times more likely to be reported stolen or lost.
They’re also more likely to be altered or returned deliverable than electronic payments, per First Citizens Wealth.
US Treasury estimates showed that the paper check discontinuation could save the government about $750 million yearly as well.
Americans have been urged to provide a bank account for direct deposit or to enroll in a pre-paid debit card program to access benefits without any pauses or delays.
Direct deposit is the most advocated method by experts, as it can safely and securely link a checking or savings account, debit card, or even a fintech account like Purple.
Additionally, with a Direct Express Prepaid Debit Card option, a credit check isn’t required, and the card can be used like a standard debit card with cash deposited from the SSA onto it every month.
Americans who are familiar with the SSA website can log into their
“My SSA” account and select “Direct Deposit” for the most streamlined way to sign up, or by calling the administration at 1-800-772-1213.
Heading in-person to the nearest Social Security office with a voided check or letter from a bank would work, too.
Go Direct, a government website, also helps Americans with electronic payment setup for Social Security, Supplemental Security Income (SSI), Social Security Disability Insurance (SSDI), and more.
Those who still prefer a different route can download and complete a paper form from the Go Direct website with direct deposit details and submit it by mail.
What are the Social Security payment changes?
Paper checks will eventually disappear
Donald Trump on March 25 signed an executive order declaring that all federal departments and agencies must end their use of paper checks and switch to electronic payments by September 30 2025.
The U.S. Treasury now has less than four months to phase out the paper checks it uses for the likes of tax refunds and the roughly 456,000 Social Security checks that are mailed monthly.
The executive order will “modernize how the government handles money, switching from old-fashioned paper-based payments to fast, secure electronic payments,” the administration said.
The White House said, “Paper-based payments, such as checks and money orders, impose unnecessary costs, delays, and risks of fraud, lost payments, theft, and inefficiencies.”
Under the order, all government departments and agencies will have to issue disbursements via electronic transfer methods, like direct deposit, debit or credit card payments, digital wallets and real-time transfers.
Consumers will have until Sept. 30 to set up an online bank account or some form of digital payment option.
Source: NBC News
More information can be found on the Go Direct landing page.
The Treasury Electronic Payment Solution Contact Center can also be called at 1-877-874-6347 to set up the details for Americans who don’t have immediate access to the internet or are unfamiliar with navigating the online process.
It’s important to note that Social Security recipients who have been getting paper checks and haven’t signed up for an electronic method by September 30 will likely face delays until they do.
ADVANCE NOTICE
The SSA has been working to make sure there would be no disruptions since this summer, however.
“We have been communicating directly with beneficiaries since July 1, and we have worked diligently to ensure that the less than one percent of individuals who receive paper checks have ample time to enroll,” a spokesperson for the federal agency told CBS News.
Several notices were also sent to affected households.
Social Security technicians are also still on hand to assist with the transition and answer any questions.
POTENTIAL EXCEPTIONS
Recipients are able to file forms for exceptions to the paper check law, with reasonings that include having no access to banking or electronic payment tools or the experience of extreme hardship.
The US Treasury must determine the circumstances qualify and approve of the exceptions.
Some elected officials like Senator Elizabeth Warren (D-Mass) have vocalized concerns that many seniors remain “unbanked,” meaning they don’t have access to traditional banks.
This could result in detrimental delays in benefits.
About 4.6% of Americans are unbanked currently, per Bankrate.
The SSA is also expected to run out of money in the coming years, leaving some Americans with only partial benefits.
Two senators recently detailed a plan to prevent this from happening.
