A U-TURN on the Social Security Administration’s (SSA) plan to scrap paper checks will save thousands of Americans from worrying about their next check.
The agency’s plan to widely scrap checks was set to go into effect on September 30.
Donald Trump had planned to end paper check payments for Social Security by September 30[/caption]
Under the original plan recipients would have had until September 30 to set up online banking if they hadn’t done already[/caption]
The SSA had previously stated that paper checks were 16 times more likely to be stolen or lost before they reached the recipients.
Instead, the SSA will continue to send out paper checks to beneficiaries, rather than the purely electronic method that had been touted.
This u-turn benefits recipients who might not have access to electronic forms of payment.
Even though the US government is stepping back on its non-paper plans, it is still encouraging Social Security recipients to make the jump to electronic payments, according to an SSA spokesperson.
President Donald Trump initially signed the Executive Order for electronic checks back in March.
There were some exceptions to the rule, like if a recipient was experiencing extreme financial hardship.
Those who had no access to electronic banking could also choose to stick with paper checks.
However, this would have been approved by the US Treasury on a case-by-case basis.
The plan drew widespread criticism from lawmakers at the time.
Massachusetts Democratic Senator Elizabeth Warren spoke with Social Security Commissioner Frank Bisignano back in July about the plan to widely discontinue paper checks.
She criticized the plan, and highlighted the hundreds of thousands of Americans who relied on paper payments.
Warren said: “There are about 600,000 Americans who still receive their paper checks — it’s a small fraction of people who receive Social Security payments, but it’s a population that often needs checks through paper.”
STILL CONVINCED
One of the main benefits of the plan to the government would have been the money saved.
Paper checks cost roughly $0.50 each, compared with 15 cents for an electronic funds transfer, the SSA said at the time.
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
The White House also said at the time of the order that paper checks impose unnecessary payment delays that would be eliminated with electronic checks.
UNBANKABLE
One of the main issues the plan overlooked was the fact that millions of Americans do not have traditional bank accounts, per Bankrate.
This is because Americans are either worried about the costs that come with holding accounts, or do not believe they make enough to qualify for one.
These people typically rely on check-cashing services or other non-bank financial companies, such as PayPal or Venmo.
According to AARP, roughly every one in five households headed by someone 65 or older in the country is in the situation.
The outlet also found that for two out of every five households headed by someone age 50 to 64, that person does not hold a typical bank account.
President Donald Trump initially signed the Executive Order for electronic checks back in March[/caption]
