A MAJOR change is coming for Social Security recipients.
The Trump Administration is doing away with a Social Security policy that has been around for nearly a century.
A major change to Social Security could impact millions (Stock)[/caption]
Beginning September 30, the Social Security Administration will stop mailing out paper checks to recipients.
Moving forward, most recipients will have two options to get their Social Security checks.
- Direct deposit to existing bank account.
- Open a prepaid debit card called Direct Express
The SSA says the move is an effort to modernize the federal payment system, save money and cut down on fraud.
“Paper checks are 16 times more likely to be lost or stolen compared to electronic payments, increasing the risk of fraud,” The SSA said in a blog post.
“Electronic payments provide a safer, more secure way to receive benefits,” The SSA added.
And as for cutting down on expenses, the SSA says it costs about 50 cents to mail out a check. But electronic transfers cost less than 15 cents.
“This shift could save the federal government millions of dollars annually,” the SSA stated.
The change would affect more than half a million recipients or 0.8% of beneficiaries, CNN reports.
But some people may still receive paper checks.
EXCEPTIONS
According to the GoDirect site, there are three situations in which a recipient who still needs a paper check can request a waiver.
1. If “electronic payments would impose a hardship due to a mental impairment”
2. If the recipient “lives in a remote geographic location lacking the infrastructure to support electronic financial transactions”
3. If the recipient is 90 or older.
Those who believe they qualify for waivers can call the US Treasury Electronic Payment Solution at -855-290-1545.
They can also print a form and mail it to the address listed on the bottom.
WHEN SOCIAL SECURITY PAYMENTS ARE MADE
Social Security payments are issued on the second, third, or fourth Wednesday of each month based on the recipient’s birthdate:
- Second Wednesday: For individuals born between the 1st and 10th of the month
- Third Wednesday: For those born between the 11th and 20th
- Fourth Wednesday: For those born between the 21st and 31st
However, Sen. Elizabeth Warren says she has met with Social Security Commissioner Frank Bisignano to discuss potential exceptions, according to CNN.
“Their plan is to start with people who do have checking accounts,” she said on a call with reporters July 23.
“But he made a commitment that no one will be left behind, and the people who still need access to paper checks will have that access to paper checks,” she continued.
The switch to electronic payments did not start with the Trump Administration, however.
For years, laws have prompted federal agencies to make payments electronically.
But they’ve been allowed to make some exceptions.
The Treasury notes that moving away from paper checks is a major effort to fight fraud.
“Paper checks are increasingly the front door for fraud,” The Treasury said in a statement.
“The Treasury is committed to raising awareness of the growing fraud risks associated with paper checks and providing Americans with the knowledge and tools to fight financial fraud and make informed financial decisions,” The Treasury added.
