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Treasury: End to paper checks
Monday - 1/3/2011, 10:31am EST
Digital News Writer
The Treasury Department will stop issuing paper checks by 2013 to those who receive federal benefits.
It's a move that could save the government nearly $1 billion. Millions of people who receive social security, Veterans Affairs checks and other benefits will transition from paper checks to direct deposit.
"For those who are new enrollees, we will offer only electronic alternative staring May of this year," said Dick Gregg, fiscal assistant secretary at Treasury. "For those currently receiving checks, they have until March of 2013 to switch over."
Treasury already issues 80 percent of its benefit payments electronically, Gregg told the Federal News Radio. "Treasury has been issuing electronic payments for over 40 years. So we're very capable of making the switch from paper to electronic. We have very highly a automated system and [it's] very reliable. We see this as a transition that we've been doing over many years... So we're pushing to get the remaining 20 percent from check to electronic."
Gregg said Treasury has been working very closely with the VA and Social Security to move ahead with this change. Together the agencies have put together a public education campaign for benefits recipients, including a website called Godirect.org.
"We expect that as people that as people get the word either through checking the website...or by getting inserts into their check statements, for those who are currently receiving checks, we'll be working very hard the next two years to make sure everyone is aware of this change and get them to convert early rather than waiting until the last minute." Gregg said.
Every year, the government processes about 600,000 claims for lost or stolen checks. Social Security alone could save $1 billion over the next decade from phasing out paper checks, according to Treasury.
Those who do not or cannot set up direct deposit will be issued debit cards with their benefits after the 2013 deadline. The debit cards are part of Treasury's plan to ensure that everyone who receives benefits will have a means of accessing that money.
"As long as we can get in touch with them they can get their payments. The payments, for example, on the debit card are automatically deposited into their account on the day it's due. So if they're traveling or if there's bad weather they don't have to worry about whether or not they're going to be able to get it to the bank."
Already 1.5 million people use the debit cards to receive benefits payments.
Gregg said the electronic payment system is faster and more secure, especially during emergency situations such as hurricanes when people need to evacuate or when mail may be delayed or lost.
"We have two years to make sure we contact everybody and to get them to make the conversion," Gregg said. "It's extremely important that they do that so we don't have any interruption of payment and we don't intend to have any interruption."
Employees who need to make the change to electronic payments are urged to contact Treasury at Godirect.org or call 800-333-1795.