A federal payment can go wrong in two directions. Money can reach someone who shouldn’t be receiving it, or funds owed to a legitimate recipient can arrive late or require additional work to obtain.
The Treasury Department is putting more controls ahead of the first scenario. During fiscal 2026, Treasury said Tuesday (Oct. 6), the department screened more than 1.1 billion federal payments totaling approximately $3.7 trillion. About 13,500 payments totaling $175 million that would have gone to deceased individuals were returned.
Treasury also piloted checks of bank-account ownership and the presence and format of Taxpayer Identification Numbers associated with federal payments. Both capabilities became fully operational Sept. 30, giving Treasury additional information to assess before releasing funds.
The data provide a large-scale example of the economics of catching an improper payment while the money remains with the payer. The same infrastructure has to move legitimate payments without creating delays, errors and additional work for recipients and government agencies.
More Data Before the Money Moves
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Treasury’s Do Not Pay program gives federal agencies and states administering federally funded programs access to data used to check identity and eligibility before payments are made. Treasury said access to Do Not Pay data increased from 4% of federal programs at the end of fiscal 2025 to 99%, while agencies screened 2.3 billion records, up from 641 million a year earlier. Nine data sources were added, including company-registration information, select checks against Social Security Numident data and grantee audit findings.
Adding bank-account ownership deepens the level of information available closer to disbursement. An agency may have determined that a person qualifies for a payment, while Treasury can separately examine whether the account designated to receive it belongs to the intended recipient or an authorized party.
Preventing improper payments is only one side of federal payment performance.
The stakes extend beyond Treasury’s recovery costs. Government payments frequently arrive at a point when recipients already have plans for the money. PYMNTS Intelligence’s February 2026 “New Reality Check: The Paycheck-to-Paycheck Report” with Ingo Payments found that about two-thirds of paycheck-to-paycheck consumers struggling to pay bills who received tax refunds used the money to pay bills or reduce consumer debt. Only about 12% put the refund into savings.
Government payments showed a similar relationship between speed and satisfaction, which means that having some surety in place before the payment travels towards its final destination can help accelerate the entire process. PYMNTS Intelligence found that 89% of consumers receiving government disbursements instantly were satisfied, compared with 74% receiving them through non-instant methods.
Faster delivery raises the stakes for getting the payment information right before release. Instant payments compress the period available to detect an incorrect recipient, account or identifier. Treasury’s expansion of account-ownership and taxpayer-ID checks places more of that work ahead of disbursement.
Treasury’s fiscal 2026 figures put $175 million against the first goal. PYMNTS Intelligence supplies another measure for the second: recipients checking payment status, contacting agencies, delaying bills and borrowing while waiting for government money.
As more federal payments move toward electronic and faster delivery, those two measures will become harder to separate. The payment has to be right before it leaves because the opportunity to intervene is shrinking, and once it is approved, recipients expect the money to arrive quickly, too.
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