Fed begins phase-out of paper benefit checks - Navy News | News from Afghanistan & Iraq - Navy Times

Fed begins phase-out of paper benefit checks

Paper checks for federal benefits are going the way of the dinosaurs, and the first step happens May 1.

People newly applying for federal benefits as of that date must choose an electronic payment option at the time they sign up for benefits — and paper checks will no longer be an option. This applies, for example, to disability payments, GI Bill payments and other benefits through the Veterans Affairs Department, Social Security, and Supplemental Security Income.

Anyone currently receiving federal benefits by paper check must switch to direct deposit by March 1, 2013. To do this, go to www.GoDirect.org, call the Treasury Electronic Payment Solution Center’s toll-free help line at 800-333-1795, or speak to someone at your bank or credit union.

Those who would rather receive their payments on a prepaid debit card — or who do not have an account at a financial institution — can receive a Direct Express Debit MasterCard card through GoDirect.org.

If you already receive your checks electronically, no action is required.

The change affects benefits paid through the Treasury Department but does not affect any pension payments from any federal agency, including military retirement payments.

In recent years, more people have been moving to electronic payments, which are safer and more convenient. Electronic payments now make up more than 75 percent of all noncash payments nationwide. Among federal benefit recipients, about eight in 10 people already receive their Social Security or other federal benefit payments electronically, officials said.

The move also saves money for taxpayers — about $1 billion over the next decade, according to Treasury officials.

Processing a paper-check transaction costs 92 cents more than a direct deposit payment, Treasurer of the U.S. Rosie Rios said in a statement reminding Americans of the change.

Under a final rule issued Dec. 21 by the Treasury Department, federal regulations were changed to generally require all federal benefits to be paid electronically, including Social Security, Supplemental Security Income, VA, Railroad Retirement Board, Office of Personnel Management benefits and other nontax payments.