More than 5 million Americans, about 110,000 of them living in Virginia, still receive paper checks for their Social Security and other federal benefits. About 13 percent of those Virginians live in the Richmond region. It all comes to an end on March 1, 2013.
Recipients still receiving benefits through the mail have until March 1 to take steps to have their benefits directly deposited into a bank account or sign up to use a special debit card.
The transition to electronic payments was started two years ago this month (see video), according to Walt Henderson, director of the electronic filing strategy division of the Treasury Department's Financial Management Service.
At that time, more than 11 million people were receiving paper checks for Social Security and other federal benefits. At the present time, 90 percent of recipients have switched to electronic payments. This has been an option for 25 years.
Virginia is also switching over to all-electronic payments for state income tax refunds, starting this year. Paper checks will no longer be issued. Federal and state officials both point out the added safety of using electronic deposits.
It should be noted that in 2011, more than 440,000 paper checks were lost or stolen across the country. There is also a considerable amount of savings in switching to electronic payments, with savings to the federal government estimated to be more than $1 Billion over the next 10 years.
The Treasury Department was authorized by Congress to make all federal benefits electronic in the 1990's. Henderson said they held off making it official until electronic payments and the use of debit cards was more widely accepted.
No one will lose their Social Security benefits, and the Treasury Department is sensitive to the differing circumstances that may arise. The department will be notifying people not making the deadline by mail to offer options available to them.
Recipients will be asked to call the Treasury Department at 1-800-333-1795 to start the process. It is advisable to not wait until the last minute to do this. People need to know that a bank account is not needed.
How to set up Electronic payment
Call 1-800-333-1795 or go to www.GoDirect.org.
What you will need
1. Social Security number or claim number
2. Your 12-digit federal benefit check number
3. Amount of your most recent federal benefit check
Using Direct Deposit option
You will also need:
1. Financial institution's routing number, found on your personal check.
2. Your bank account number
3. Type of account, either checking or savings.