White Plains, NY (Law Firm Newswire) March 19, 2013 - The Treasury Department is asking that all federal benefit recipients opt-in to receive their benefits electronically.
Two years ago, the Treasury Department initiated a “green” campaign, urging people who receive federal benefits such as Social Security, Veterans Affairs, and Social Supplemental income in check form, to accept direct deposit instead. Officials estimated that they were sending out close to 11 million checks per month.
The campaign included sending notices along with monthly checks inviting people to use direct deposit and releasing public service announcements and reminders via the AARP, banks, and senior centers. The Treasury Department now reports that since the campaign started, the request for direct deposit has lessened the number of checks to five million each month, and 93 percent of people getting federal benefits do so via electronic payments.
The federal government is now pushing for that last seven percent of individuals who receive checks via U.S. postal service to make the switch. By switching from those last 5 million paper checks to direct deposit or debit card deposit, the Treasury Department estimates that it can save as much as $1 billion during the next ten years.
For those individuals who do not want the money directly deposited into their bank account, or do not have a bank account, the money can be sent directly to the person's Direct Express debit card, which is accepted wherever MasterCard is used.
While there is no consensus on why everyone has not made the switch to electronic deposit, and the assumption is that some federal benefits recipients may be concerned that a direct debit card deposit is not as safe as a paper check; they may worry that their account may be hacked. However, it is paper checks which have proved to be somewhat unreliable; the Treasury Department reported more than 440,000 complaints of lost or stolen paper benefits checks in 2011.
Though the Treasury Department has stated that sticking with paper payments is not an option, they do not plan to cancel the benefits of anyone who refuses to use an electronic deposit system. The department is planning to send out reminder letters, requesting that they switch.
For any individual who wishes to switch to direct deposit or debit card, they can speak to their bank, their local Social Security office, call (800) 333-1795, or sign up online at www.GoDirect.org.
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