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Social Security - Direct Deposit

Social Security Checks: You are asked to Switch to Direct Deposit by March 1

Millions of Americans still receiving paper checks for Social Security and other federal benefits have less than two months to switch to electronic payments. In an effort to cut spending, federal officials began retiring paper checks in favor of direct deposits and prepaid “Direct Express” debit cards in May 2011. Since then, the Treasury Department has required all new recipients of payments from federal benefits programs -- including Social Security, Supplemental Security Income disability, Veterans Affairs and government pension plans -- to sign up for electronic payments. It set a March 1, 2013, deadline for all other recipients to do the same.

According to CNN, approximately 93% of payments are now being made electronically. However, about 5 million checks are still mailed each month -- representing an additional $4.6 million in monthly costs, since each mailed check costs 92 cents more than a direct deposit transfer, Treasury officials said on Tuesday. The agency said if it didn't push for the switch to electronic transfers, it would cost taxpayers another $1 billion over the next 10 years. Anyone who fails to make the change will still receive paper checks, but will be the target of more aggressive communication efforts, such as additional mailings, said Walt Henderson, a Treasury official. He warned that after March 1, Social Security beneficiaries receiving paper checks are not in compliance.

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