Paper Checks To Be Eliminated For Federal Payments

Register now

WASHINGTON – The U.S. Treasury Department has issued a new rule phasing out paper checks for federal benefit payments, a move the agency says will save Social Security $1 billion.

The final rule, issued today, calls for anyone applying for benefits on or after May 1, 2011, to receive their payments electronically. Those who have been receiving paper checks will have until March 1, 2013, to set up an account to which their benefits may be direct deposited.

The federal government has long sought to move federal payments away from paper to electronic format. The final rule requires all federal benefits, including Social Security, Supplemental Security Income, Veterans Affairs, Railroad Retirement Board, Office of Personnel Management benefits and other non-tax payments, to be made electronically. Benefit recipients have the option of direct deposit into a bank or credit union account of their choice or into a Direct Express Debit MasterCard card account. More than 1.5 million beneficiaries have signed up for the Direct Express card since it was introduced in 2008.

Treasury said it is launching a public education campaign to inform Americans about the rule change and to help them understand what they need to do to get their payments electronically, whether they already receive payments by check or will be applying for federal benefits for the first time soon. Current check recipients will receive information enclosed with their payments, and the national campaign will also include public service announcements, a newly redesigned website,, ongoing financial literacy programming and partnerships with hundreds of national, regional and local organizations.


For reprint and licensing requests for this article, click here.