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Federal government to phase-out paper checks for benefit payments

Norwalk Reflector Staff • Mar 1, 2013 at 11:57 AM

The federal government will be making a significant change in how it administers non-tax federal payments to millions of families. As of Friday, most recipients of federal benefits will need to choose an electronic option for payment.

The government will soon begin requiring electronic payment for Social Security, Supplemental Security Income, veterans' compensation and pensions, wages for federal employees, civil service annuities, railroad retirement benefits, black lung payments and Indian Trust Fund payments. Federal tax refunds will not be affected.

"An electronic transfer by the Treasury Department to a checking or savings account at a financial institution is the fastest, most secure method of payment," said David Rothstein, director for asset building at Policy Matters. "The prepaid debit card recommended by Treasury for those without bank accounts has relatively few fees, so it's better than many other existing prepaid cards."

Paper checks will be available for individuals born before March 1, 1921, those who have a mental impairment, and people who live in remote areas lacking the infrastructure to support electronic financial transactions.

Policy Matters recommends that families using the prepaid debit card sign up for monthly paper statements, take advantage of options to access cash for free, and get free account updates to track their balances. Additional resources include the Go Direct website and the U.S. Treasury Department's Direct Express® Information.

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