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Thursday, March 28, 2024 | Back issues
Courthouse News Service Courthouse News Service

2013 May Bring an End|to Social Security Checks

WASHINGTON (CN) - Beginning March 1, 2013, all recipients of federal benefit and other non-tax payments would receive their payments by direct deposit, either to a bank account or to a Direct Express MasterCard account, a prepaid card program, according to proposed rule changes by the Treasury Department's Office of Fiscal Services.

The agency hopes that enrollment in the Direct Express MasterCard account will eliminate the need for the disbursement of any federal benefits by paper checks, which its says are expensive to process, take longer to reach the recipient and often are cashed, by those without bank accounts, at check cashing facilities that charge a premium for the service.

Eighty percent of individual disbursements from the Treasury are made by electronic funds transfer. According to Treasury surveys, in 2007 there were approximately 2.1 million Social Security recipients and 1.8 million Supplemental Security Benefits recipients who did not have bank accounts.

Some recipients who have bank accounts prefer not to use direct deposit because they fear their benefits will be improperly garnished by creditors. To meet the concerns of these recipients, the government will not allow creditors to place a lien on the cards, which are issued directly to the recipient.

The Treasury receives more than 500,000 calls a year from recipients who receive checks, reporting some problem with the check or difficulty in cashing it.

In fiscal year 2009, more than 670,000 Social Security and Supplemental Security Income checks were reported lost or stolen. Each year, the Treasury investigates more than 70,000 cases of altered or fraudulently endorsed checks, totaling $64 million in estimated value. When checks are misrouted, lost in the mail, stolen, or fraudulently signed, the Treasury must send replacement checks to the recipient. This can result in a delay in payment of weeks or months if fraud or counterfeiting is involved, creating a hardship for benefit recipients whom the department says rely on these payments for basic necessities such as food, rent or medication.

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