All Federal Benefit Payments Will Be Paid Electronically
Source: U.S. Department of the Treasury, Financial Management Service
Have you heard the news that the U.S. Department of the Treasury is phasing out paper checks as a payment option for federal benefit payments? People who receive Social Security, Supplemental Security Income or other federal benefit checks for themselves or on behalf of someone else, must switch to an electronic payment option by March 1, 2013.
People in New York still rely on 393,569 Social Security and 168,699 Supplemental Security Income (SSI) paper check payments each month. Tell them to take action today. In doing so, you will help them enjoy the advantages of electronic payments immediately:
· Safety – No risk of lost or stolen checks.
· Ease – No need to make a trip to cash or deposit a check.
· Control – Money is on time, every time.
· Fast Access – Money is accessible sooner.
Making the switch to one of the two electronic payment options recommended by the Treasury Department is fast, free and easy:
· Direct deposit. People with a checking or savings account can sign up to receive their money through direct deposit. Their money will go straight into their checking or savings account on payment day each month and be accessible from virtually anywhere.
· Direct Express® Debit MasterCard® card. This prepaid debit card provides another reliable, low-cost alternative to paper checks. Money is posted to the card account on payment day each month. Cardholders can make purchases, pay bills and get cash anywhere Debit MasterCard® is accepted. Optional deposit notifications and low balance alerts by phone, email or text message are available for free. For information on card fees that may apply for some optional services and features, visit GoDirect. No bank account or credit check required.
To make the switch to direct deposit or the Direct Express® card, current federal benefit check recipients can contact their federal benefit agency office, visit the Treasury Department’s Go Direct®, or call the U.S. Treasury Electronic Payment Solution Center at (800) 333-1795. For direct deposit, people can also make the switch at their local financial institution.
Getting Involved is Easy
The Treasury Department’s Go Direct® campaign makes it easy for you! Here’s what you can do:
· Display Go Direct campaign and Direct Express® card materials in your facilities.
· Link to www.GoDirect.org from your website.
· Actively encourage the people you serve who currently get federal benefit checks to make the switch to electronic payments today.
· You can also communicate to people getting ready to apply for federal benefit payments what information they need on-hand to choose their preferred electronic payment option when they fill out their benefit application.
For more information or to order free materials, GoDirect
Overall I do think this is a good move, the number of people who lose paper checks, have them stolen is quite large and it's almost many people are unaware that the local SSA office has the authority to cut an emergency check right then and there without having to go through the payment center.
My first reaction is to have to immediate concerns;
1. SSA at this time has no plans to send direct mail to beneficiaries and recipients regarding the transfer. They are going to rely on community providers to spread the word and SSA publications.
2. Already there have been some instances of outfits trying to scare benefit recipients to sign up for their cards, which may not have all the benefits and protections of Direct Express. These "private' cards have exorbitant fees that can consume the entire months cash benefit.
3. There are some fees involved;
- ATM cash withdrawal, surcharge may apply - $0.90 each withdrawal
- Monthly paper statement mailed to you - $0.75 each month
- Funds transfer to a personal U.S. bank account - $1.50 each time
- Card replacement - $4 after one free each year
- Overnight delivery of replacement card - $13.50 each time
- International ATM cash withdrawal currency conversion fee (3%) will be added
This may not seem like much, but since the SSI (Title XVI, not Title II) monthly maximum Federal amounts for 2011 are $674 (minus state supplements) this is significant.
Some advantages according to SSA;
Can I use the Direct Express® card without any fees?
Yes, it is possible to use your card for free. There is no sign-up fee and no monthly account fee. Many other services are provided free of charge, including:
Purchases at retail locations, cash back with purchases, or cash withdrawals through bank or credit union tellers;
One ATM cash withdrawal for each deposit posted to your account each month when using a Direct Express® card network ATM;
Optional notification of deposits to your debit card by phone, E-mail or text message*;
Optional low balance alert when your account balance falls below a certain level; and
Access to the toll-free customer service number or website 24 hours a day, seven days a week.
* Text message - this is huge! For years advocates have been pleading to SSA that best way to bridge the digital divide is to send out important messages via texts!