Friday, May 13, 2011

U.S. Treasury Phasing Out Mailing of Social Security Checks

The U.S. Treasury has announced that it is phasing out the mailing of Social Security checks to retirees. Beginning May 1, anyone newly applying for Social Security, Veterans Affairs, or other federal benefits will need to choose an electronic payment method. Paper checks will no longer be an option. People currently receiving their federal benefits by paper check must switch to direct deposit by March 1, 2013.

Rosie Rios, the Treasurer of the United States, noted that it costs the federal government 92¢ more to issue a payment by paper check than by direct deposit. That cost is significant, since more than 18 million baby boomers are expected to reach retirement age during the next five years.

In December 2010, the Treasury Department published a final rule to gradually eliminate paper checks for federal benefit payments [Financial Management Service Press Release, 4/26/11].

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