Beginning May 1, any new beneficiaries who sign up to receive Social Security, Veterans Affairs, or other federal benefits will need to choose an electronic payment option, as paper checks will no longer be issued.
The move, which was published as a final rule in December 2010, will save taxpayers $1 billion over the next 10 years. It's part of an increased effort by the U.S. Treasury to make all Social Security payments and statements electronic.
Those currently receiving a paper check must switch to an electronic option by March 1, 2013.
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U.S. Treasurer Rosie Rios highlighted the savings by ceremonially writing a check to American taxpayers in the amount of $1 billion. "More than 18 million baby boomers are expected to reach retirement age during the next five years, with 10,000 people a day becoming eligible for Social Security benefits," said Treasurer Rios. "It costs 92 cents more to issue a payment by paper check than by direct deposit. We are retiring the Social Security paper check option in favor of electronic payments because it is the right thing to do for benefit recipients and American taxpayers alike."
Electronic payments are faster and safer than paper checks; in 2010 alone, more than 540,000 Social Security and Supplemental Security Income (SSI) checks were reported lost or stolen and had to be replaced.
The Treasury Department's Go Direct public education campaign provides information about the change and makes it easy for those currently receiving paper checks to switch online or by calling the U.S. Treasury Electronic Payment Solution Center's toll-free helpline at 1-800-333-1795.
The Social Security Administration also recently announced that it would be stopping paper statements in an effort to save money. If all goes according to plan, 2011 will be the last year that paper benefits statements are issued. A public service campaign starring George Takei and Patty Duke is currently airing on telelvision and radio encouraging retirees to go online and review their benefits.
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