The days of retirees receiving Social Security benefit checks by mail are long gone. The U.S. Department of Treasury began phasing that payment method out in 2011. Effective March 1, 2013, any new applications for Social Security or Supplemental Security Income benefits must include sign-up for electronic payments to a bank, credit union or a savings and loan account.

When the law went into effect, those who were receiving checks were advised to register on my Social Security and make the switch to direct deposit. The Treasury Department did claim exceptions would be considered in rare cases, and a request form was made available to check recipients. The Request for Payment of Federal Benefits by Check required such justification as mental impairment or remote geographic location where electronic payments may be prohibitive. The other option was and still is a Direct Express debit card.

Direct Express Debit Card

Direct Express is a debit card that benefit recipients may use to receive electronic payments. It is available to those with and without a bank account. Because it is not a credit card, there is neither a credit check to obtain it nor a minimum balance to maintain it.

The benefit payments are electronically loaded into the card, ready to be used at ATMs, and for purchases online and at stores that accept Debit MasterCard. The card can also be used for payments from other federal agencies such as the Coast Guard, Department of Labor, Railroad Retirement Board and Veterans Affairs. Also, unlike a credit card, money spent is limited to the amount of funds in the account, and there is no line of credit.

The Direct Express debit card is advantageous in that it eliminates the need to carry cash, the card is automatically loaded on payment day, and it is convenient for shopping. The downside is that only one free withdrawal from an ATM is permitted with each deposit. However, there is no fee for cash withdrawals from a bank teller or cash back with purchases. If you decide to switch to the direct deposit method, simply close the debit card account and sign up for direct deposit online.

Rationale for Electronic Payments

Electronic payments are cost effective for the government and beneficial to retirees as well. Treasury officials explained that the billion-dollar savings to taxpayers over a decade accumulates from the 92-cent premium of one mailed check versus a direct deposit transfer, as reported by CNN. Eliminating paper is also a way of going green, so there is an environmental impact as well. The retirees get their payment faster than “snail mail” without any concerns of the check being lost in the mail or stolen.

Related article:

Medicare Part A