The jig is up.
Two years ago, the Treasury Department initiated its Go Direct campaign to persuade people still receiving paper checks for their Social Security, Veterans Affairs, S.S.I. and other federal benefits to switch to direct deposit.
“At that point, we were issuing approximately 11 million checks each month,” or about 15 percent of the total, Walt Henderson, director of the campaign, told me.
After putting notices in every monthly check envelope, circulating public service announcements and putting the word out through banks, senior centers, the Red Cross, AARP and other organizations, the Treasury Department has since shrunk that number to five million monthly checks.
That means 93 percent of those getting federal benefits are using direct deposit or, if they prefer or lack a bank account, a Direct Express debit card that gets refilled each month and can be used anywhere that accepts MasterCard.
“So people have been getting the word and making the switch,” Mr. Henderson said. Now, federal officials are pushing the last holdouts to convert to direct deposit by March 1.
Although officials say the change is not optional, the jig isn’t entirely up. If you or your older relative does not respond to their pleading, “we’re not going to interrupt their payments,” Mr. Henderson said. But the department will start sending letters urging people to switch.
The major motive is financial: shifting the last paper checks to direct deposit or a debit card (only 2 percent of recipients go that route) will save $1 billion over the next decade, the department estimates.
But safety enters the picture, too. One reason some beneficiaries resist direct deposit, Mr. Henderson said, is that they fear their electronic deposits can be hacked or diverted. Having grown up in a predigital age, perhaps they feel safer with a check in their hands.
But they probably aren’t. In 2011, the Treasury Department received 440,000 reports of lost or stolen benefits checks. With direct deposit, “there’s no check lingering unattended in a mailbox,” Mr. Henderson noted.
The greater reason for sticking with paper is probably simple inertia. “It’s human nature to procrastinate,” he said.
But unless you or your relatives want a series of letters from the Treasury Department, it is probably time for the last fence-sitters to get with the program.
They don’t need to use a computer. People can switch to direct deposit, or get the debit card, at their banks or the local Social Security office. More simply, they can call a toll-free number, (800) 333-1795, and have agents walk them through the change. Or they can sign up online at www.GoDirect.org.
They will need:
- Their Social Security number.
- The 12-digit federal benefit number found on their checks.
- The amount of the most recent check.
- And, for direct deposit, a bank or credit union routing number, usually found on the front of a check. They can have direct deposit to a savings account, too.
A caution for New Old Age readers: If you think your relative has not switched because he or she is cognitively impaired and can no longer handle his finances, you can be designated a representative payee and receive monthly Social Security or S.S.I. payments on your relative’s behalf. This generally requires a visit to your local Social Security office, documentation in hand.
Paula Span is the author of “When the Time Comes: Families With Aging Parents Share Their Struggles and Solutions.”
The New Old Age Blog: Officials Say Checks Won't Be in the Mail
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