Monday, March 11, 2013

No More Paper Checks for Social Security

If you've been receiving a social security or disability check in the mail, you better get ready for a MAJOR change. Effective this month, the Social Security Administration is forcing millions of older Americans to jump into the 21st century and the digital age of banking. That means you either need to have a checking account for direct deposit or get used to spending your money with a pre-paid debit card. This move will affect about five million people.

The Department of the Treasury says the government will save approximately one billion dollars over the next ten years through the elimination of the paper checks and going paperless will also result in fewer lost and stolen checks.

If you don't have a bank account, there are a couple of options to get started:

Direct Express Card – a prepaid MasterCard debit card recommended by the Treasury. For no monthly fee (unlike many other prepaid cards), your benefits are deposited automatically to the card, which can be used to make purchases or withdraw cash from an ATM. Your deposits are also federally insured by the FDIC.

Open an Electronic Transfer Account – ETAs are available at nearly 400 banks nationwide. They are a low-cost account designed specifically for Americans receiving some sort of federal government benefit payment (including Social Security).

Some EXCEPTIONS are being made the new paperless social security checks. The government says people who are 90 and over and are still getting Social Security benefit checks will continue to receive their benefits the same way. There are approximately 275,000 people who fall into that category.

In addition to the automatic waiver from electronic payments for those 90 and over, people living in remote areas who might have trouble getting to a bank can also petition for a waiver from the new rules.

So it looks like the days of grandma stashing cash inside her mattress may be over.