Effective May 1, 2011 paper checks will no longer be an option for new Federal benefit applicants.
All new Federal benefit applicants will choose one of the two electronic payment options recommended by the Treasury Department: direct deposit or the Direct Express® Debit MasterCard® card. The retirement of paper checks is a part of the US Treasury Department’s Go Direct Campaign. It is projected that the move to pay all Federal benefits electronically will save taxpayers one billion dollars over the next ten years.
Why Go Direct?
-It is Safer and Easier!
Electronic payments provide a safer, more convenient and cost-effective way for people to get their federal benefits than paper checks. In fact, beneficiaries are 125 times more likely to have a problem with a paper check than with an electronic payment.
-It is More Convenient!
When people get payments electronically, they don't need to visit a financial institution to cash or deposit a check to gain access to their money. This is particularly important to people who are elderly or disabled, or who lack access to transportation. No bank account or credit check is required for the Direct Express® Debit MasterCard® card. There are no fees to sign up for the card, no monthly fees or overdraft fees. Simply use the card to pay for everyday purchases and avoid the need to cash a check or carry large amounts of cash. Or, if you simply prefer a prepaid debit card, the Direct Express® card is a safe, no or low-cost electronic payment option.
-It will result in Taxpayer Savings!
This measure also provides significant savings to American taxpayers who will no longer incur the $120 million price tag associated with paper checks – a number that would have ballooned as tens of millions of baby boomers begin to retire.
For direct deposit, beneficiaries should have the following on-hand when they fill out a Federal benefit application:
•Financial institution's routing transit number
•Account type (checking or savings)
Beneficiaries who do not have a bank account or who prefer a prepaid debit card can sign up for the Direct Express® card. If choosing this option, people should notify their Federal benefit agency at the time they apply for the benefit.
Beneficiaries, who currently receive Federal benefits by paper check, must switch to one of the electronic payment options by March 1, 2013. The Treasury Department will mail notices about this change to everyone who was still receiving paper checks.
Check recipients can switch to direct deposit or the Direct Express Debit MasterCard card by calling the US Treasury Electronic Solution Center at (800) 333-1795, Monday - Friday from 8:00 a.m. to 8:00 p.m. EST.