If you are waiting by the mailbox for your new Social Security check you are going to have a long wait. The Social Security Administration announced that anyone signing up to receive Social Security benefits next week will not be eligible to receive paper checks through the mail. In fact, other government benefits recipients will stop receiving paper checks in light of the new methods being introduced for benefit payments.
The move will take checks out of the equation and replace the archaic system with direct deposit. Currently 85% of beneficiaries get Social Security monies through bank direct deposits. The measure was introduced to prevent check fraud as a consequence of stolen checks. It will also help the government reduce the cost associated with issuing replacement checks.
It is estimated that the Treasury department will save over $1 billion within a ten year time frame by eliminating the paper check system. Additionally benefit recipients will receive their monthly payments in a safer, more efficient manner. It is also estimated that 12 million pounds of paper will be saved in the first five years which is good news for the environment as a whole.
For those still eligible to receive checks (about 10 million), they will have a two year window to make the change from paper checks to electronic deposits and all accounts will receive direct deposits effective March 1, 2013. The monies being deposited will be accessible on the payment date of each month with no wait for the US postal service to deliver their checks.
In light of the various identification scams and check cashing frauds, the direct deposit method may be the ideal tactic to keep benefit recipients safe from identity theft and other fraudulent hassles.
Social Security Adminstration Plans to Eliminate Paper Checks was created by and is property of American Consumer News.
