The Treasury Department’s Looming Electronic Payment Deadline
With the electronic payment law just two months away form going into effect, the U.S. Department of the Treasury has issued a simple reminder to those still receiving government checks: switching to electronic payments is mandatory.
The Treasury Department issued that warning as part of a report indicated that around seven percent of Social Security and SSI payment checks are still being made via mailed traditional checks: a practice that, by law, will stop on March 1, 2013. That equals around five million checks a month that will soon be eliminated, saving American taxpayers around $1 billion over the next 10 years.
Instead of traditional paper checks, federal beneficiaries must switch to direct deposit or the Direct Express Debit MasterCard card, into which the government can directly enter the appropriate funds.
While the 93 percent adoption rate the digital switch has seen so far is a positive sign, David Lebryk, commissioner of the Treasury Department’s financial management service, urged stragglers to adopt to electronic means now.
“Choosing direct deposit or the Direct Express card makes it easier, safer and more convenient for beneficiaries to receive their payments. Switching to an electronic payment is not optional – it’s the law,” Lebryk said. “If you or a loved one still receive paper checks for your benefit payments, now is the time to switch. It’s free and easy – just call 1-800-333-1795 or visit www.GoDirect.org.”
A 2010 ruling by the Treasury Department mandates the electronic shift for all federal beneficiary checks must be made electronically by the March 2013 date. Since May 1, 2011, all new applications for Social Security, SSI, Veterans Affairs and other non-tax payments have been forced to accept electronic delivery.
The Treasury Department says it’s increasing its efforts to educate the public about the electronic switch as the deadline nears.
To read more about switching to electronic payments, read the original Finextra piece here.