News From Terre Haute, Indiana

January 28, 2013

Social Security ready to go digital

Recipients have until March 1 to sign up for direct deposit or debit card

Brian Boyce
The Tribune-Star

TERRE HAUTE — The digital age marches onward as senior citizens prepare for the final run of paper Social Security checks.

March 1 remains the deadline for Social Security recipients to sign up for direct deposit or the Direct Express Debit MasterCard options afforded by the federal government. As noted in statements published by the Treasury Department in December 2010, the phasing out of paper checks for beneficiaries has been ongoing since May 1, 2011, including all new recipients of Social Security, Supplemental Security Income (SSI), Railroad Retirement plans and benefits afforded through the Department of Veterans Affairs.

Walter Henderson, director of the EFT Strategy Division of the U.S. Department of the Treasury’s Financial Management Service, said in a telephone interview that 93 percent of federal recipients are already on board, with only about 5 million still receiving live, paper checks.

“It’s easy to make the switch,” he said, pointing out myriad options available to recipients at their banks, over the telephone or online. For seniors without bank accounts, the Direct Express Debit MasterCard option gives them a debit card onto which the funds will be electronically transferred each period, he said.

About 58 million people receive Social Security payments each year, and when those on disability programs are added, it amounts to about 65 million, he said.

Issuing paper checks costs the government a little more than $1 for each transaction, compared with 10 cents for a direct deposit, he said. Over a 10-year period, the switch is expected to save a minimum of $1 billion, he added.

According to information provided by the Treasury Department, in Indiana alone, nearly 83,000 Social Security and SSI checks are sent each month.

For some seniors, these payments constitute the majority of their household income, and Henderson said there’s no threat of a halt to payments for failure to comply with the direct deposit mandate. The minority of people still using the paper checks are being actively encouraged to make the switch.

“We’re trying our best to get everyone signed up by March 1,” he said, explaining officials believe it’s probably the most elderly or possibly those who are sick who haven’t switched yet. Assistance with the process will made available if requested, he said.

Michele Graham, coordinator at the Area 7 Agency on Aging and Disabled of West Central Indiana, said she hasn’t heard many complaints and doesn’t foresee a major impact coming from the move.

“Most people are already on it. Since 2011 they’ve been making new enrollees use it,” she said, pointing out most other programs, such as the Supplemental Nutrition Assistance Program, are also processed electronically.

If there are concerns, it’s most likely because of people’s aversion to change, she said, adding some people might not have bank accounts or might have difficulty filling out the paperwork to obtain a Direct Express Debit MasterCard. Assistance with that process can be obtained.

Some opposition to the move has sprouted on the Internet, however. The website www.paperoptions.org advocates for consumer choice in matters pertaining to electronic transfer of funds.

According to information provided by the website, surveys indicate that as many as 30 percent of Americans are not online, and just four out of 10 low-income households have Internet access in their homes. Forty-five percent of senior citizens do not own a computer, the survey found.

But Wabash Valley resident Patricia Drake has received Social Security for 10 years now and said she’s been on direct deposit from the start.

“It’s a great idea. You don’t have to worry about someone stealing it out of your mailbox. You don’t have to worry about being home when the check gets there,” she said.

Her sister just recently made the switch to direct deposit and is happy with the move, she said. At first, some senior citizens might be reluctant as they prefer the feel of getting a live check. But ultimately the convenience and security afforded by the paperless transaction wins out, she said.

“She likes it now. She doesn’t have to worry,” Drake said.

Brian Boyce can be reached at 812-231-4253 or brian.boyce@tribstar.com.