Jeri Schaf: No Government Checks in Your Mailbox Beginning in March

vpasheader0311By March 1, 2013 all federal benefit payments will be electronic. This includes payments for Social Security Retirement, Social Security Disability, Supplemental Security Income (SSI), Veterans Administration, Office of Personnel Management, and Railroad Retirement benefits.

The move to eliminate paper checks is motivated both by cost and safety. Right now, the federal government spends $120 million each year to produce and mail checks – a cost ultimately shouldered by taxpayers. Problems of stolen checks, financial crime and tracing lost or late checks will be virtually eliminated.

Anyone applying for federal benefits will need to choose an electronic option when they file their application. The following information will be needed: account type (savings or checking), account number, and financial institution’s routing number. The numbers can be found on a check, deposit ticket, or account statement.

People who currently receive federal benefits paper checks should make the switch as soon as possible. Those who have not switched by March 1, 2013 will have no choice in how they receive their payments. If the recipient has a bank or credit union account, they should sign up for direct deposit soon.

The simplest way to do this is to visit your financial institution, where staff can arrange for the change. Most banks and credit unions have at least one type of account that will allow you to access your money free of charge. Be sure to bring your claim number or benefits check number with you. The check number is a twelve digit number located in the upper right hand corner of the benefits check. The claim number is not on the paper check, but is included on all correspondence from the paying agency. Without one of these numbers, you will not be able to change to direct deposit.

Those currently receiving paper benefits checks who do not arrange direct deposit into a bank account before March 1, 2013 will receive a Direct Express® Debit MasterCard® from the U.S. Treasury. Each month, on the date the benefits check has usually been received, the debit card will be credited with the monthly benefit amount.

The debit card may be used to make purchases at merchants who accept Debit MasterCard®, receive cash-back with purchases, and get cash from bank tellers. The card may be used once monthly to make a free cash withdrawal from an ATM in the Comerica Bank network. Additional ATM withdrawals, and withdrawals at out-of-network ATMs will cost $0.90 each. A monthly paper statement will have a fee of $0.75 each month, and each time funds are transferred from the debit card to a personal U.S. bank account a $1.50 charge will be incurred.

Beneficiaries should consider carefully the advantages and disadvantages of the debit card. The card allows the holder to make many purchases without the use of cash, but users should familiarize themselves with how such a card is used.

Precautions that should be taken to safeguard the card and PIN number; users should understand that if someone obtains unauthorized access to the debit card, all their remaining balance could be stolen. While a deposit notification and ability to check the card’s balance are available, this information can only be obtained via the Internet; those without Internet access will incur a charge for this information by phone or mail.

Families and caregivers of benefits recipients, especially those who are frail or have no history of using a bank account or debit card, should discuss the available options with their loved ones. An offer to help with the switch to electronic funds transfer would likely be much appreciated.

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