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News & Observer - Feds moving to direct deposit for benefit checks starting March 1

February 11, 2013
In The News

By Josh Shaffer

RALEIGH — The check is no longer in the mail.

Starting March 1, all federal benefits will arrive electronically, as the U.S. Treasury scraps paper payments for direct deposits.

If they haven't already, people receiving Social Security, veterans benefits, railroad retirement pay or other federal money must sign up to get it sent electronically.

Those without checking accounts will receive debit cards that can be used like cash.

In a news conference Monday, U.S. Rep. David Price, a Democrat from Chapel Hill, praised the switch to direct deposit for the $120 million in estimated savings in paper and postage costs. It also spares beneficiaries from having to cash checks or risk losing them.

The challenge is making sure recipients get the news before the changeover, particularly those who don't have bank accounts.

"The Treasury Department has made it just as simple as they can," he said. "We know that it's good for beneficiaries. ... (But) these transitions are sometimes a little ragged."

Those receiving payments have four options to sign up: visit, call 800-333-1795, go to their banks or credit unions or talk to the agency that issues the checks.

For those with bank accounts, federal payments will be deposited automatically and will show up on statements.

For those without, debit cards will be issued with benefits added automatically. Price said that some who miss the deadlines will probably have the cards issued to them.

"People are not going to suddenly lose their checks," he said.

Michael Dawkins, district manager for the Social Security Administration, said 86 percent of the people receiving benefits in Wake County have already signed up.

Still, officials are scrambling to reach everyone, particularly those who are "unbanked" and not as computer savvy.

"Sometimes older persons have trouble with changes of this magnitude," said the Rev. Daniel Sanders, pastor at Springfield Baptist Church in Raleigh.

Beneficiaries older than 91 will receive a waiver.

As he explained the change, and to illustrate its benefits, Price told the story of his uncle, who died at age 98 after retiring from the Postal Service. He lived a long and healthy life as a mail carrier, never marrying, and his death brought a surprise when his family sorted through his disorganized belongings.

"We found a box stuffed with postal retirement checks," Price said. "Uncashed."