NEW YORK (MainStreet) – Soon your government check might not arrive in the mail.
The U.S. Treasury Department officially set a date on Tuesday for when people will no longer receive Social Security and other benefit checks by mail.
According to the new official terms, anyone applying for benefits on or after May 1, 2011, will receive their payments electronically. Additionally, those currently receiving paper checks will need to switch to direct deposit by March 1, 2013.
Under a law passed by Congress in 1996, the government has the right to halt mailing paper checks for all government payments outside of refund checks from the Internal Revenue Service. In June, the Treasury Department issued a preliminary proposal that would require 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.
The final rule closely mirrors this initial proposal, but allows people who are age 90 and up who are still getting Social Security benefit checks to continue receiving checks in the mail. It also allows those in remote areas who do not readily have access to a bank to petition for a waiver from the new stipulations.
People without an account at a financial institution can receive their payments on a prepaid debit card. According to the Treasury Department, more than 1.5 million beneficiaries already receive payments via this Direct Express Master Card, which was introduced in 2008.
According to Richard L. Gregg, the Treasury Department's assistant fiscal secretary, the changeover is meant to save taxpayers from the annual $120 million price tag associated with paper checks. It will also save Social Security $1 billion during the next 10 years, which provides other benefits to recipients.