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SSA Will Stop All Paper Checks in March 2013

December 27, 2012

March 1, 2013, is the date that federal benefit payments will transition to all-electronic delivery.  The U.S. Department of the Treasury is urging all recipients of federal benefits, including SSI and Social Security disability or retirement benefits to switch to direct deposit or the Treasury-recommended Direct Express program.  The card allows federal benefit recipients to pay bills, withdraw cash and make purchases without paying check-cashing fees.  The money on the Direct Express card is FDIC-insured, and many card services are free.

The Treasury Department’s Go Direct public education campaign is working with more than 1,800 partner organizations throughout the country to spread the message about the electronic payment rule and educate federal benefit recipients about their options.  The Treasury Department encourages beneficiaries who have questions about electronic payments to visit to view several educational videos and print materials that explain how electronic payments work and how to use the Direct Express card.

Check recipients can sign up for direct deposit or the Direct Express card by calling toll-free 1-800-333-1795, visiting, or talking to their local federal paying agency office.  The process is fast, easy and free.  Individuals will need their Social Security number or claim number, their 12-digital federal benefit check number and the amount of their most recent federal benefit check.  If choosing direct deposit, recipients also will need their financial institution's routing transit number, (often found on a personal check) account number and account type (checking or saving).  There are no sign-up fees or monthly fees to receive benefits electronically.

Anyone already receiving federal benefit payments electronically will continue to receive their money as usual on their payment day, and no further action is required.

Keep in mind that waivers of this seemingly ironclad rule are available for persons who are older than 90, have a mental impairment, or live in a remote location.  There have been recent Congressional hearings on numerous issues surrounding this upcoming transition, including the difficulty of the waiver process. Margot Saunders at the National Consumer Law Center (NCLC) testified on the hardships wrought by the very rigid waiver application process.  We will keep you informed of any changes in this process that may be implemented.

Margot and others have also been working on a variety of other issues around direct deposit and electronic benefit cards for receipt of federal benefits.  One area of special concern is private label prepaid debit cards -- i.e., cards that are not Direct Express, but offered by other companies.  One example is Metabank, which offers the NetSpend card.  These cards carry a Visa or Mastercard logo, and typically charge consumers high fees for basic use, withdrawals, overdrafts, and in some cases serve as a gateway to high-cost credit and payday loans.
At present, private label cards are only loosely regulated by Treasury.  Existing regulations need to be clarified and improved.  Margot is in need of client examples to fuel further advocacy with Treasury on this issue.

Have you seen clients facing problems with private label/non-Direct Express cards?  Please send a  brief description by email to Margot Saunders at


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