Treasury making final push to ditch paper benefit checks

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The U.S. Treasury Department is making a final push to prod people who still receive Social Security and other federal benefit checks in the mail to save taxpayers big bucks and sign up for direct deposit.

Two years ago, the department issued a rule setting a March 1, 2013, deadline for phasing out paper benefit checks.

While roughly 90 percent of people already have converted to electronic payments, the department still issues some 5 million benefit checks per month, including about 180,000 in Pennsylvania and 15,000 in Allegheny County.

Eliminating those remaining checks would save taxpayers about $1 billion over the next 10 years, the department said. Producing and mailing a paper check costs the government $1.02 vs. 10 cents for an electronic payment.

"Switching to electronic payment is not optional -- it's the law," said David Lebryk, commissioner of treasury's financial management service.

People who do not have an account with a bank or credit union can have their payments electronically deposited onto a prepaid debit card called Direct Express Debit MasterCard. Enrollees receive the card in the mail and payments are automatically credited to the card each month.

Money on the card can be used to pay bills and make purchases anywhere that accepts MasterCard. There are no sign-up fees or monthly fees. Recipients can withdraw cash from the card at an ATM once a month at no charge. After that, withdrawals cost 90 cents. Lost cards are replaced one time for free. Subsequent replacement cards cost $4.

The downside to having benefits loaded onto a card is that recipients could get hit with a fee, say for making more than one cash withdrawal per month, Treasury Department spokesman Walt Henderson said.

Beyond a natural tendency to procrastinate, misunderstandings about how direct deposit works could be preventing some people from converting to electronic payments, he said.

"We are reassuring people they don't have to get on the Internet or use a computer or buy a computer" to take advantage of direct deposit, he said.

Although the deadline for people to sign up for electronic payments is less than two months away, those who don't comply won't stop receiving their benefits.

"We realize there are unique circumstances, so we are not going to cut off a person's check. But we will be reaching out to make sure they understand the requirement," Mr. Henderson said. "We're pretty confident the vast majority of people have gotten word."

In a relatively small number of cases, the government is allowing people to continue receiving paper checks.

Automatic waivers are being granted to anyone 90 or older as of May 1, 2011. People living in remote areas without sufficient banking services and certain people with mental impairments also may apply for a waiver.

To sign up for direct deposit or the Direct Express debit card, visit or call 1-800-333-1795. People with existing bank or credit card accounts also can ask their financial institution for help.

Waiver applications are available at 1-800-333-1795.


paper checks

What: The U.S. Treasury Department has set March 1 as the deadline for recipients of federal benefits to convert from paper to electronic payments.

Who: People who receive Social Security, Supplemental Security Income, Veterans Affairs, Railroad Retirement Board, Office of Personnel Management or Department of Labor (black lung) federal benefit checks. (Welfare benefits, which are handled by the state, aren't included.)

How: Visit or call 1-800-333-1795.

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Patricia Sabatini: or 412-263-3066.


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