If you’re one of the 7.6 percent of North Carolinians who still receives paper benefit checks from Social Security, that’s all over on March 1.
As a cost-cutting measure estimated at saving taxpayers about $120 million, anyone currently receiving a paper benefit check from the federal government has to sign up for direct deposit to a bank or credit union account, or be sent a “Direct Express” Debit MasterCard. Those who take no action will automatically receive the Direct Express card.
“Choosing direct deposit or the Direct Express card makes it easier, safer and more convenient for beneficiaries to receive their payments. Switching to an electronic payment is not optional – it’s the law,” said David Lebryk, commissioner of the U.S. Treasury Department’s Financial Management Service, in a statement Tuesday. “If you or a loved one still receive paper checks for your benefit payments, now is the time to switch.”
The Treasury Department, as part of its regulatory process, passed what’s called a “final rule” in December 2010 to gradually phase out paper checks and institute entirely electronic payments. In fact, everyone applying for new benefits since March 1, 2011had to sign up for one of the two paperless options.
Those affected are anyone who receives benefits from the Social Security Administration — including Supplemental Security Income — the Department of Veterans Affairs, the Railroad Retirement Board, the Office of Personnel Management, black lung benefits from the Department of Labor or other non-tax payments.
An estimated 93 percent of all Americans receiving Social Security and SSI payments no longer receive paper checks. In North Carolina, that’s 92.4 percent, or more than 1.93 million people. Resolving the holdouts in the state is estimated to save $1.76 million per year.
Nationally, the program aims to save $1 billion in federal funds over the next decade.
A study released in July 2012 by KRCResearch — commissioned by MasterCard on behalf of the Treasury Department — found 95 percent of people happy with the debit card arrangement in the four years since it was introduced.
“For four years, millions of senior citizens, people with disabilities and other Americans who lack access to traditional banking services have used their Direct Expresscards to pay bills, withdraw cash and make purchases without worrying about their paper checks being lost or stolen or paying check-cashing fees,” Lebryk said.
If you receive a paper check and need to change your payment arrangements, call 800-333-1795, go to www.godirect.orgor visit the local Social Security Administration office at 2559 N. Queen St.
Wes Wolfe can be reached at 252-559-1075 or wes.wolfe@kinston.com. Follow him on Twitter at WolfeReports.
Federal agencies and programs affected:
Social Security and Supplemental Security Income
Veterans Affairs
Railroad Retirement Board
Office of Personnel Management
Department of Labor (black lung benefits)
Source: U.S. Department of the Treasury