Tuesday, May 3, 2011
As of May 1, 2011, new applicants for Social Security, Veterans Affairs or other federal benefits must choose to have funds either direct deposited to bank accounts or loaded onto prepaid cards. With paper checks no longer an option, U.S. taxpayers will reportedly save $1 billion over the next 10 years.
"More than 18 million baby boomers are expected to reach retirement age during the next five years, with 10,000 people a day becoming eligible for Social Security benefits," said Rosie Rios, Treasurer of the United States. "It costs 92 cents more to issue a payment by paper check than by direct deposit. We are retiring the Social Security paper check option in favor of electronic payments because it is the right thing to do for benefit recipients and American taxpayers alike."
The Treasury Department said approximately eight out of 10 federal benefit recipients already receive payments via direct deposit or the Direct Express Debit MasterCard prepaid card. Recipients who received payments via paper check prior to May 1 have until March 1, 2013, to switch to one of the two electronic payment options.
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